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Law Commission bills propose
changes to spouses' and cohabitees' rights to inherit on
intestacy
Two draft bills published by the Law Commission could
potentially change the rules that apply to the distribution of the
estate of a person who dies intestate, that is, without a will. The
main changes will affect spouses and co-habitants' rights to
inherit.
If a person dies intestate leaving a spouse or civil partner but
no "issue" (children or, failing that, grandchildren etc)
and if that person also leaves surviving parents or siblings, under
the current law, the surviving spouse receives only the first
£450,000 of the estate plus any personal property. The
rest is then divided equally between the spouse in one share and
the parents of the deceased in the other or, if there are no
surviving parents, the deceased's siblings.
Under the proposed new law, the surviving spouse or civil
partner will receive the whole estate, irrespective of the
value.
Where a person dies leaving a spouse or civil partner as well as
issue, current law provides that the spouse receives the first
£250,000 plus personal property. The remainder is then
divided with half going to the issue straightaway. The other
half is placed in trust to provide an income for the surviving
spouse for his or her lifetime and then passes to the issue upon
death.
Under the proposed new law, the surviving spouse will still
receive a priority lump sum and the remainder is still
split. The difference is that the spouse receives his or her
half outright as capital, to spend as he or she pleases, rather
than in trust.
The proposals under the second draft bill ('The Inheritance
Co-Habitants Bill') go even further. Currently co-habitees
have no automatic right to inherit if their partner dies intestate
and usually have to bring a claim against the estate under the
Inheritance (Provision for Family and Dependants) Act
1975. Such a claim has no guarantee of success and raises the
spectre of inter family litigation and large legal costs.
The new bill provides that somebody who has co-habited with a
person who dies intestate should be entitled to a part of their
estate if they had been co-habiting for a period of at least five
years immediately prior to death or two years if the couple had a
child living with them.
There are other changes envisaged which, alongside the two new
bills, make the intestacy provisions more appropriate for the
reality of today's society.
So far as co-habitants are concerned, they are a welcome
development. Matthew
Evans, Partner at solicitors Hugh James says "Recent
research undertaken by the Law Commission shows that around 7.5
million people are living in cohabiting families, representing
around 15% of all families. As such, it is arguably very
important that the law changes to provide for this large section of
the population."
Mr Evans continues: "The intention behind the
proposals generally is to govern the circumstances where a person
dies without leaving a will. However, the point that cannot
be emphasised enough is that state-imposed inheritance is rarely
satisfactory and can, in most cases, be easily avoided if people
make a valid will. By taking that simple step, people can
decide at which point their estate passes out of the hands of the
state and into their own."
It remains to be seen to what extent the proposals will be
adopted into law but, given the exhaustive consultation process
that has been undertaken, it seems likely that, one way or the
other, there will a drastic overhaul of the inheritance laws in the
near future.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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