Fair Shares? - Wills & Probate

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New Law Journal | 13 January 2012 | www.newlawjournal.co.uk

SPECIALIST LEGAL UPDATE

59

Wills & probate

Fair shares? Proposed reforms to intestacy law reflect the reality of modern families, says Joel Wolchover In Brief zzRecent Law Commission project reviews the law of intestacy & family provision claims on death, in an attempt to reflect the reality of modern families. zzProposed reforms will effect the law relating to spouses & cohabitants.

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he Law Commission has recently completed a project to review the law of intestacy and family provision claims on death; and those of us working on the project have kept in mind the need to ensure that the law is clear and straightforward. But we have also attempted to develop reforms that reflect the reality of modern families and remove unnecessary or unduly technical obstacles in the way of bereaved family members and dependants with a claim to a share in the property of a person who has died. Absence of a will Practitioners will know that, no matter how much clients are encouraged to make a will, many will fail to do so and others make wills that do not include reasonable provision for close family and dependants. The distribution of property not included in a valid will is governed by the intestacy rules, which are largely contained in Pt IV of the Administration of Estates Act 1925. Whether or not there is a will, the distribution of the estate can be challenged by a “family provision” claim under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975), on the basis that reasonable financial provision was not made for the applicant (who must come within one of the limited categories of applicant). The Law Commission has reviewed these

two areas of inheritance law in the light of the social context in which the law operates. We have taken account of a wide range of evidence, including a large-scale survey of public attitudes to inheritance (which was funded by the Nuffield Foundation). We have considered the law in other countries, in particular those that share our legal traditions. We have also benefited from new information about the amount of property that people leave on death.

ss 31 and 32 of the Trustee Act 1925 (TA 1925). We received almost 150 consultation responses from members of the public, lawyers and other professionals and organisations—including law firms, charities and professional bodies. Our final report, Intestacy and Family Provision Claims on Death (2011) Law Com No 331, sets out a package of reforms to modify the current legislation to reflect modern social expectations and to remove arbitrary or unduly technical aspects, while leaving intact the fundamental structure of the English law of succession to property on death. There are more than 30 recommendations in total—too many to detail here—so what follows is a brief discussion, first of the reforms that would affect the surviving spouse of a person who has died intestate, and then of our recommendations for unmarried couples. Spouses The report’s principal recommendations relate to the entitlement under the intestacy rules of a surviving spouse, by which we mean the husband, wife or civil partner of a person who has died leaving assets not covered by a valid will. Consultation responses and the public attitude research confirmed our provisional view that the surviving spouse should remain the primary beneficiary. One of the key pieces of research which informed the provisional proposals in our consultation paper was an analysis, by HM Revenue & Customs, of the net value of estates for which a grant of representation has been obtained. This is reproduced at Appendix D of the final report. The research shows that only around 10% of intestate estates are valued at more than £250,000 and 2% at above £450,000. These values are significant because they represent, for deaths from 1 February 2009, the levels of “statutory legacy” to which a surviving spouse is entitled under the intestacy rules (in addition to the deceased’s personal chattels) before having to share with any other beneficiary. Even these findings are likely to

“...a man’s dying is more the survivors’ affair than his own” Thomas Mann, The Magic Mountain Proposed reforms In October 2009, we set out our initial findings and provisional proposals for reform in a consultation paper. Further questions were asked in a supplementary consultation exercise in summer 2011, specifically about proposed changes to


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