Inheritance Rights for Unmarried Couples and Spouses

The Law Commission published a detailed final report on 14 December 2011 entitled the “Intestacy and Family Provision Claims on Death” following extensive consultation on reform of the intestacy rules and the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”).

The key changes affecting unmarried couples and spouses areas follow.

Unmarried Couples

Despite the misconception that the term “common law husband/wife” has some legal standing, unfortunately it does not. If an unmarried partner dies without making sufficient provision for their surviving partner in their Will then the survivor has no right to an inheritance from the estate under the existing intestacy rules.

They would be entitled to bring a claim under the 1975 Act so long as they had been cohabiting with them for at least 2 years prior to the death, as husband and wife in the same household . However, this involves instructing specialist inheritance dispute solicitors like ourselves and pursuing a formal ’75 Act claim through the Courts. Understandably many people may be reluctant to do this at such a difficult time.

The Law Commission recognises the anomaly in the law, particularly as research suggests that there are now more than 2.3 million unmarried couples in the UK; a figure which is set to rise to 4 million by 2033.

As such, the Commission has recommended to the government that a surviving partner, should in some circumstances be able to share in their deceased partner’s estate automatically, without having to make a formal 1975 Act claim. This would only have effect if the deceased was not married or in a civil partnership at the time of death.

To qualify for this automatic inheritance on intestacy it would need to satisfy the definition of Period of Cohabitation (as for the 1975 Act) but the qualifying time is different so that:-

You must have been cohabiting for at least five years at the date of death; or
If you and your deceased partner have a child living in the same household at the date of death, then the qualifying period of cohabitation reduces to two years.
Qualifying partners would then be entitled to the same provision as a spouse - see below for the recommendations for change on these.

The 1975 Act will remain in place to deal with those situations where couples do not meet the thresholds outlined above. The qualifying period of two years in the current 1975 Act will remain so that couples without children who have cohabited between 2 and 5 years will be entitled to bring a claim under the 1975 Act as they will not be entitled to automatic provision under the intestacy rules.

Changes are also recommended to the 1975 Act in relation to unmarried couples who have children and who cohabit as husband and wife. In those circumstances, they would be entitled to bring a claim without any qualifying period being necessary i.e. the two year rule is removed for cohabitants with children.

Spouses (including Civil Partners)

As matters currently stand, if a married person dies without a Will (ie dies intestate) then the spouse is only entitled to the entire estate if there are also no surviving children (or their descendants) or parents/siblings (or their descendants) of the deceased.

Scenario A- no children
If there are surviving parents/siblings (or their descendants) of the deceased then the spouse is only entitled to the first £450,000 as a statutory legacy, together with the personal possessions. They also receive half of the remainder with the remaining half going to the surviving relatives in this order:-
Parents
Brothers or Sisters (whole blood) or their children (or children’s children etc).
Scenario B- children
If there are surviving children (or their descendants) of the deceased then the spouse is only entitled to the first £250,000 as a statutory legacy together with the personal possessions. They also receive a life interest in half of the remainder (i.e. not an absolute interest as above) so that on their death this half share of the remainder passes to the deceased’s children equally. The second half of the remainder goes to the children equally at the time of distribution of the estate (i.e. it is not subject to a life interest).

The Law Commission was keen to ensure that the spouse remained the primary beneficiary on intestacy. The Commission also sought to make intestacy easier for spouses.

So its first recommendation was that in Scenario A above (ie no children) the parents and siblings etc will no longer be entitled to benefit from the deceased’s estate. In those circumstances the spouse would be entitled to the entire estate.

Their second recommendation was that in Scenario B above (ie children) the spouse should continue to receive the statutory legacy and personal possessions but instead of a life interest in half of the remainder they should receive that half share absolutely i.e. they can do what they want with it and it will not revert to the children on the spouse’s death. The remaining half would still pass to the children equally at the date of distribution of the estate.

They also recommend provisions for the regular updating of the amount of the statutory legacy and for the rate of interest payable upon it.

Summary

You might wonder why the Law Commission and the Government are going to such lengths to change the rules of intestacy when it would just be simpler for people to execute a Will and make it clear where they want their estate to be left.

However, the Law Commission’s website states: -
“Studies suggest that between half and two thirds of the adult population do not have a Will and that those who need one most are the least likely to have made one.”

“The intestacy rules must strive to reflect the needs and expectations of modern families.”

“Where the [intestacy] rules (or the deceased’s will) fail to make adequate provision for close family members or dependants, it is important that the law does not place unnecessary obstacles in the way of a valid family provision claim.”

You may be surprised to know that, as the Law Commission confirms on its website. “The intestacy rules date back to 1925 and have not been comprehensively reviewed for more than 20 years… the 1975 Act has not been the subject of a full review since it was enacted”. It is clear therefore that change is long overdue.

The changes recommended by the Law Commission are favourable to both spouses and co-habitees and welcomed by the legal profession. However, the proposals will take some time to be enacted into an Act of Parliament as they will need to pass through the various stages of parliament (where they may be significantly amended) before they are made into law.

In the meantime, it is all the more important that you protect your rights by ensuring your inheritance is secured in your spouse or partner’s Will or alternatively by making a claim under the 1975 Act. Inheritance Act claims must be commenced at the earliest opportunity after death as there is a 6 month time limit from the Grant of Representation.

We are also willing to bring claims under the 1975 Act on a No Win, No Fee basis if the prospects of success are reasonable.

You can find a useful summary of the Law Commission’s recommendations here:-
http://lawcommission.justice.gov.uk/docs/lc331_intestacy_summary.pdf

You can also find the full report here:-
http://lawcommission.justice.gov.uk/docs/lc331_intestacy_report.pdf

If you are a bereaved spouse, civil partner or unmarried partner and unsure of your right to an inheritance from their estate then call us on freephone 0808 139 1599 for a free assessemnt of your claim.