Changes to the Law of Intestacy and Family Provision … But Do They Go Far Enough?
The Inheritance and Trustees' Powers Act 2014 received Royal Assent on 14 May 2014 and has an anticipated commencement date of 1 October 2014.
Inheritance Act lawyer, Naomi Ireson, considers the changes and reforms which will come into force later this year.
THE REFORMS TO CLAIMS MADE PURSUANT TO THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975 ("THE 1975 ACT")
- Claims can now be brought before a grant of representation is issued. This is of benefit to clients where the personal representatives delay in obtaining a grant with a view to avoiding court proceedings being issued against them. It also avoids the costs and litigation of obtaining a citation forcing personal representatives to obtain the grant.
- Applications under section 9 of the 1975 Act, which enables the deceased’s severable shared property held under a joint tenancy to be treated as part of the estate, can now be brought outside of the six-month time-limit from the date of the grant at the court's discretion. Previously the court could not exercise its discretion to extend time.
- Claims pursuant to section 1(1) (d) described as claims by a “child of the family" will now be extended to include any person who was treated by the deceased as a child of the family, not only in relation to a marriage or civil partnership, but in relation to "any family" in which the deceased had a parental role. Despite this development, the relationship between the deceased and the applicant must still be akin to that between a parent and a child. This confirms the ability for grandchildren to bring a claim against their grandparents’ estate where they were raised by them instead of their parents.
- Claims pursuant to section 1(1) (d) have also been extended to include a single parent family.
- Claims by those alleging to have been maintained by the deceased pursuant to section 1(1) (e) will be affected by the removal of the need for a "balance sheet" assessment. At present the applicant has to show that the deceased contributed more than the applicant did as failing that, the applicant cannot be said to have been maintained by the deceased and a claim under this section will fail. However, the amended section 1 (3) will require the deceased to have me been making a substantial contribution towards the reasonable needs of the applicant. Of importance is the fact that contributions made between people within a domestic context will no longer be weighed against one another.
- The "deemed divorce test" pursuant to subsection 3 (2), under which the court has to have regard to what provision would have been made during ancillary relief proceedings, has now been amended. The Court will have regard to whether the deceased maintained the applicant, the duration of that maintenance, the basis on which it was provided and the extent of maintenance which the deceased contributed. The court also has to consider whether the deceased assumed responsibility for the applicant’s maintenance.
- Under the new section 3(4) (a), for claims brought under section 1(1) (e), the court has to look at the basis of the maintenance and the extent of the contribution made.
THE REFORMS TO THE INTESTACY RULES
- Where somebody dies without a will, leaving a spouse or civil partner but not issue their estate will pass to their spouse or civil partner absolutely. Under the old rules, parents or siblings would have an interest in the estate if it was worth more than 450,000.
- Where somebody dies without a will leaving a spouse and issue the rules have been amended so that the spouse inherits the first £250,000 absolutely and the balance will now be split equally with one half to the spouse absolutely and the remaining half passing to the issue in equal shares. Under the earlier intestacy rules, the spouse inherited a life interest in one half of the remainder. It can therefore be seen that spouses derive greater benefit under the new rules whereas the issue of the intestate do not.
- A surviving spouse is now entitled to the deceased’s personal chattels absolutely and the definition has been amended to include tangible moveable property except for property: (a) consisting of money or securities for money, (b) used at the death of the intestate solely for business purposes, (c) held at the death of the intestate solely as an investment.
- The rules have been amended so that there is no longer a presumption that where somebody dies intestate and his parents were not married at the time of his birth, it is no longer presumed that his father died before the intestate providing the father was named on the deceased birth certificate or equivalent official birth record.
Whilst the reforms go some way to updating the law in order to take account of the circumstances of modern families, in our view they do not go far enough.
The law of intestacy and family provision continues to fail to recognise the fact that many couples cohabit and have children without marrying. The advice must therefore remain that having a valid Will is absolutely crucial, particularly for those who cohabit with a partner. It is hoped that further reforms will be implemented by the Inheritance (cohabitants) Bill sometime in the future.
For advice on contesting a Will under the Inheritance Act and details of No Win, No Fee funding call us on 0808 139 1606