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Charlie Siegle comments on a consultation paper published by the Law Commission today, which proposes changes to the law governing intestacy and claims by relatives and dependants against a deceased person's Estate.
Of particular interest are the changes proposed to inheritance law as it applies to cohabiting couples.
Current law
At least one third of people who die do not leave a will. Under the current law if an individual dies without having made a valid will that disposes of his or her property, that property is distributed to the surviving relatives in accordance with the intestacy rules.
Those rules are over 80 years old and are complex. As an example the amount a surviving spouse (husband or wife) receives under the current intestacy rules depends on which other family members are also living. If the deceased is survived by both a spouse and children then the spouse receives all the deceased's personal belongings, a fixed maximum of £250,000 and a life interest in half of the rest of the estate. The rest of the estate passes to the children. However in practice 90% of intestate Estates are worth less than £250,000 in value.
Cohabiting couples
In contrast cohabiting couples (those who live together as a couple but are not married or in a civil partnership) do not inherit anything under the intestacy rules when their partner dies. There are around 2.25 million cohabiting couples in England and Wales and about four in five of them have not made a will because they do not think they need to.
Often in those circumstances the only viable option for the surviving partner, if they seek some provision from the deceased's estate, is to make a claim under the Inheritance Act. Under the Act the surviving partner can only make a claim if the couple were living together as husband or wife or as civil partners for a continuous two year period up to the date of the partner's death.
However Inheritance Act claims can often be long running, stressful and expensive to pursue. In addition when the Court assesses a claim made by a cohabitant the key question is what provision from the estate would be reasonable for the cohabitant's maintenance. In contrast a claim under the same Act by a surviving spouse is assessed as what provision he or she should receive that is reasonable in the circumstances. Usually that provision is what the spouse would have received if the marriage had ended in divorce and not death.
Therefore on the face of it under the current intestacy rules and the Inheritance Act, cohabiting couples are disadvantaged compared to married couples.
Proposed changes
Although the Law Commission's proposals today aim to streamline and improve the intestacy rules and the Inheritance Act in general, it is the potential impact on cohabiting couples that is particularly significant.
Under the proposed changes if a cohabiting couple without children lived together continuously for a period of at least 5 years up to death, the surviving cohabitant should receive the same provision under the intestacy rules as a spouse. If in the same scenario the couple had lived together for between 2 and 5 years continuously, the surviving cohabitant should receive 50% of the amount a spouse would receive from the estate.
If a cohabiting couple have children together the proposals today provide that there would be no minimum duration requirement for how long they have lived together up to the death and that the surviving cohabitant should be entitled to the same provision as a spouse.
The changes proposed by the Law Commission today are potentially a welcome boost for cohabiting couples in England and Wales as if implemented they bring their rights more into line with the rights already enjoyed by married couples and those in civil partnerships.
Charlie Siegle is a Solicitor in the Litigation and Dispute Resolution Team in Exeter and specialise in disputes relating to Wills and Estates and Cohabitation. He can advise clients on the issues arising out of the proposed changes announced today.
