Under English law those who make a will can in theory leave their assets to whomever they so wish. However, a significant number of people fail to make a will and consequently die 'intestate'. As a result of which their assets will be distributed amongst their family in accordance with the Rules of Intestacy.
How does this affect cohabitees?
Where a married person dies intestate the Rules of Intestacy currently provides their spouse with statutory legacy of £450,000 where there are no children, or £225,000 if there are. There is however no corresponding provision for those in a long term relationship who cohabit together. Their assets will not pass to their partner, but instead to their family, such as their parents or children.
Family Provision claims?
The Inheritance (Provision for Family and Dependants) Act 1975 ('the 1975 Act') marked a significant change in the law, providing a framework for specific individuals to apply to the Court and claim a 'reasonable financial provision' for their maintenance where a person's will or intestacy failed to financially provide for them.
Under the 1975 Act only certain people can bring a claim, which includes spouses and civil partners, and any person who was living with the deceased for a period of no less than 2 years as if they were husband and wife immediately prior to their death.
Upon intestacy, unlike a spouse who may make a claim where the statutory legacy does not adequately provide for them, a person who is in a long term relationship who lived with the deceased must pursue a claim under the 1975 Act to ensure they receive any provision for their maintenance. However, such a claim is not guaranteed to be successful and would not provide a fixed lump sum. Instead the Court will consider all the relevant circumstances and, if it chooses to exercise its discretion, it will provide a sum that it considers reasonable for the person's maintenance.
The present position is certainly open to criticism. It fails to recognise the changing dynamic of society, which sees a significant number of people in long term relationships, who rely on their partner for financial maintenance. It seems that such a disparity may soon change.
The proposed changes?
The Law Commission has recently concluded an in-depth review of the laws surrounding intestacy, and its results were published on 14th December 2011. Consequently, a variety of changes have been proposed in the Inheritance (Cohabitants) Bill and the Inheritance and Trustee Powers Bill.
It has been proposed that the statutory legacy for spouses upon intestacy, with and without children, be amended and that a cohabitee should receive an equivalent provision to that which a spouse would, where they were living with the deceased immediately prior to their death as if they were husband and wife, for a period of no less than 5 years if there are no children, or 2 years if there were children.
Consequently, and assuming the amendments to the Rules of Intestacy are accepted, where there are no children from the relationship, both spouses, and cohabitants who can fulfil the additional criteria, would receive a legacy of £405,000 plus any residue. Where there are children both would receive a legacy £250,000 with an absolute interest in half the remainder.
Such amendments go a significant way to placing spouses and cohabitees on an equal footing and prevent the need for a majority of cohabitees from having to pursue a claim under the 1975 Act. Of course there will be circumstances where similar to spouses, the statutory legacy does not provide adequate maintenance, which will require the intervention of the Court.
Problems?
No doubt new avenues of litigation will arise. Those who are excluded from an estate or have their entitlement reduced may seek to argue that a person has been cohabiting with the deceased for the requisite period of time, or that a child was not born from the relationship. Such disputes will have potentially great implications for those involved in terms of the outcome, and in costs.
It is however unclear why the proposed changes do not seek to align the criteria for eligibility under the Rules of Intestacy with the criteria for a cohabitee applying under the 1975 Act, for which it has been suggested should be amended, so that the requirement that a cohabitee must have lived with the deceased for 2 years before death be removed. It seems odd that it has not been proposed that an eligible cohabitee under the 1975 Act, must demonstrate that they have lived with the deceased for 5 years if there are no children (or 2 years if there were), to reflect the proposed changes under the Rules of Intestacy.
Nevertheless such proposals are a marked change for cohabitees. The law is beginning to acknowledge that cohabitants should have more favourable treatment upon their partner's death, which in some respects is almost akin to those who are married.
Douglas Houghton, a specialist Contentious Probate lawyer at http://www.higgsandsons.co.uk/about-us/meet-the-team/douglas-houghton.aspx offers legal advice to those who may be involved in a dispute concerning a close relative's death including the distribution of, or the administration, of their estate. If you or a relative are involved in a contested estate call Doug today on 01384 327310 or email douglas.houghton@higgsandsons.co.uk.
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