Law commission Reforms on Intestacy

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In December the Law Commission published its long awaited report
into intestacy and family
provision claims on death.The report contains recommendations for reform of the
law in these areas following responses to the consultation paper published in
2009.

The largest part of the report focuses on the area which causes
the most significant problems under current legislation. Where a couple live
together, but are unmarried, the current law dictates that the survivor is not
automatically entitled to inherit any part of the deceased’s estate. This is
the case regardless of the period of time the couple have ‘cohabited’ or
whether or not they have had children together.

According to the report; research suggests that there are 2.3
million cohabiting couples within the UK and that the current trend means this
figure will be closer to 4 million within the next 20 years.

The Law Commission recommend reform of this current legislation
but with limited scope.

They recommend that a bereaved,unmarried, partner should not need to go to
Court in order to inherit a share of their partner’s estate where the couple
has cohabited for at least 5 years prior to death.

This period is reduced to two years where the couple have had
children together.Although the Commission are reluctant to lower this period of
time to include all cohabiting couples, regardless of

the length of the cohabitation period, it recommends that the period required
before a claim against an estate can be made is lowered from the current two
year period.

These changes would bring English law into line with the current
law in other Commonwealth jurisdictions.The report contains a draft Bill, the
Inheritance (Cohabitants) Bill, which has been deliberately separated from
other  recommendations

The proposals have prompted lively debate across the industry; the focus being
on how a ‘cohabitant’ should be identified and how it is possible to establish
that someone was, or was not, living in accordance with the provisions of the
Bill at the time of death.It does not state at what point the status of an
‘unmarried partner’ is acquired or lost and the vagueness of the definitions
has been criticised. The new legislation, if it is enacted, could cause
problems for those dealing with an intestate estate

Aside from cohabitation the report also reaffirmed the automatic
right of spouses to inherit, but discussed proposed changes to how the current
intestacy rules deal with the estate. They recommend that, where a spouse dies
leaving no children, the surviving spouse should inherit the entire estate.
This contrasts with the current provisions that provide a surviving spouse with
the first £450,000 of an estate with the rest being shared with the deceased’s
parents or siblings.

Where a spouse dies leaving children the current £250,000
statutory legacy will remain but the Commission have recommended that the
current complex trust and life interest provisions relating to the rest of the
estate are to be simplified. Instead, the spouse will split the remaining
estate with the children outright. This view was highly supported in the
consultation however ideas to deal with the family home separately received
little support and have been shelved.

The full report can be downloaded from www.lawcom.gov.uk

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