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You are here: BAILII >> Databases >> The Law Commission >> Cohabitation: The Financial Consequences of Relationship Breakdown [2006] EWLC 179(8) (04 May 2006) URL: http://www.bailii.org/ew/other/EWLC/2006/179(8).html Cite as: [2006] EWLC 179(8) |
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PART 8
REMEDIES ON DEATH
INTRODUCTION
8.1 Many cohabitants make wills in an attempt to ensure that their partner obtains all, or most, of their estate in the event of their death. Provided that the will complies with the relevant formalities laid down in statute, and that the testator has capacity at the time of execution, the will should be effective to carry out the testator's intentions. If, however, the testator made a will before he or she began to cohabit and forgot to revise it to include a new partner, that will (subject to formal requirements) would stand, even though it might not reflect the true wishes of the testator at the time of death and did not provide for the testator's new partner.8.2 It is often the case that a person dies intestate: either wholly intestate (leaving no effective will) or partially intestate (although leaving a will, it does not dispose effectively of all of the person's estate). In such circumstances, the rules of intestacy are engaged in order to determine the devolution of such part of the estate which has not been disposed of by will. These rules have traditionally been based on a presumption of the likely intentions of the deceased had he or she made a will.
8.3 The devolution of a deceased's estate, whether by the dispositions contained in a will or on an application of the intestacy rules (or by a combination of the two), may be subject to challenge by certain classes of applicant under the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act"). Such applicants may contend that they have not obtained "reasonable financial provision" from the deceased's estate and that in consequence the court should make an award in their favour in the exercise of its statutory discretion to do so. This jurisdiction is based principally on satisfying the legitimate needs of the applicants rather than giving effect to the presumed intentions of the deceased.
8.4 In this Part we first consider the case for reforming the rules of intestacy in order to provide for a cohabitant of the deceased. We provisionally propose that a cohabitant should not have any automatic entitlement on intestacy. We then turn to the 1975 Act and consider criticisms of it. We make provisional proposals for its amendment in order to ensure consistency with our proposed reforms concerning financial relief on separation. Finally, we examine the case for reform of two rules concerning the revocation of existing wills.
INTESTACY
Criticisms of the intestacy rules
8.5 As we explained in Part 3, a cohabitant currently has no entitlement to any share of the estate on the intestacy of his or her partner. This means that an application may have to be made under the 1975 Act for provision to be made.8.6 However, that may not always be desirable. The Deputy Official Solicitor has explained to us a particular problem that is by no means rare. An unmarried couple, M and W, live together in a house owned by the male partner, M. The house, which is the couple's only substantial asset, is subject to a large mortgage, and is the home of the couple and their young children.[1] If M dies intestate, the house passes on intestacy to his children, and W is entitled to no part of his estate. The children cannot service the mortgage. In order to protect the home against the mortgagee, in the interests of both herself and the children, W must bring proceedings under the 1975 Act. The respondents would be the children, who must, as minors, be represented. Significant costs are therefore incurred and adversarial positions adopted at a time when W and the children should be working together.
8.7 It may be that the matter is ultimately resolved; an order is usually made whereby the house is transferred to W on her undertaking to provide a home to the children during their minority. But this is wasteful both of financial and emotional resources. The consent of the lender must be obtained before W can secure title to the house, and counsel's advice is normally required by the Official Solicitor in order to ensure that the settlement is in the interests of the minor children. This seems to us to be a serious problem.
Should cohabitants be included in the intestacy rules?
8.8 Some common law jurisdictions do make provision for surviving cohabitants under their intestacy rules. All Australian states confer on cohabitants an automatic entitlement if they satisfy a minimum duration requirement, and many provide automatic entitlement where a cohabitant had a child with the deceased (regardless of the length of the relationship).[2] New South Wales, the Northern Territory and Tasmania go further; a cohabitant of any duration inherits in the same way as a surviving spouse.[3] The Canadian provinces of Alberta, British Columbia, Manitoba and Saskatchewan provide automatic inheritance rights for cohabitants who satisfy a minimum duration requirement or who had a child with their deceased partner.[4] In New Zealand, cohabitants inherit as surviving spouses if they satisfy a three-year duration requirement. They also inherit if they had children with the deceased, or if they made a substantial contribution to the relationship and (in either case) serious injustice would result if they did not inherit.[5]8.9 It can be strongly contended that, if the objective of the intestacy rules is to give effect to the putative wishes of the intestate regarding the disposition of his or her estate, conferring rights to succeed on the intestate's cohabitant would be entirely appropriate. However, this apparently attractive proposal founders when faced with the serious factual complexities of human relationships. Both the Law Commission and its Scottish counterpart have previously considered, but ultimately rejected, reform of this kind.
8.10 The Law Commission conducted a project on the law of intestacy culminating in a final report in 1989.[6] In the course of that project, the Commission rejected the vesting of intestacy rights in cohabitants, explaining its reasoning as follows :[7]
A few consultees argued that the intestacy rules should automatically provide for cohabitants. This view was shared by the majority of the respondents in the public opinion survey.[8] However, we do not favour this approach. To include cohabitants within the intestacy rules would mean that the simplicity and clarity of the rules would be sacrificed. There would have to be very complex provisions to determine how the property should be divided between, for example, a surviving spouse and a surviving cohabitant. As well as making the rules more complex, it would also increase the costs and cause delays in the administration of estates because disputes could easily arise as to whether a particular individual was a cohabitant.8.11 We believe these problems remain. Putting to one side the potential adverse effects on the expeditious administration of estates, there are two major obstacles in the way of accommodating a cohabitant of the deceased within the intestacy rules: determining the priority of the cohabitant in relation to other relatives of the deceased, and quantifying the cohabitant's share.
8.12 The difficulty with any reform of the intestacy rules is that account must be taken of the very wide range of persons who may argue the case for entitlement to the estate: not only spouses, civil partners and cohabitants, but also children of former marriages or former relationships. It would be necessary to decide whether and to what extent the cohabitant should have priority over, for example:
(1) a surviving spouse or civil partner from whom the intestate was separated at the time of death (and who may or may not have commenced proceedings for divorce or dissolution including a claim for ancillary relief);
(2) the children of the intestate's marriage (or former marriage); and
(3) the children of the intestate and the cohabitant.8.13 In terms of quantification, there is a strong argument that not all cohabitants should obtain the same share as of right. A cohabitant who has lived with the deceased for twenty years should, one would have thought, be entitled to a larger share of the estate than someone who has only cohabited with the deceased for a matter of months. While it can be argued that a minimum duration requirement between these extremes could be imposed, that begs the question of where the line should be drawn. Any such demarcation can be criticised on the grounds that it is arbitrary, risks both the inclusion of the undeserving and the exclusion of the deserving, and remains an unsophisticated and inflexible means of achieving fairness between the competing parties.
8.14 In the early 1990s, the Scottish Law Commission conducted a consultation exercise, which included a public opinion survey, on the question of rights of intestate succession for cohabitants.[9] Although this evinced considerable support for the conferment of some succession rights on cohabitants, no clear pattern emerged as to how the estate should be divided up between the cohabitant and other potential applicants. In consequence, the Scottish Law Commission recommended that cohabitants should be able to apply to the court for an award out of their deceased partner's estate (whether the deceased died testate or intestate) if reasonable provision had not been made for them.[10] This recommendation was particularly striking as there is no generally applicable family provision legislation in Scotland.[11] The Family Law (Scotland) Act 2006 implements the recommendation in part only, limiting cohabitants' right to apply for discretionary provision to circumstances where the deceased died intestate.[12]
8.15 In our view, the inability of fixed rules to deal with the variety of factual circumstances that may arise makes vesting rights on intestacy in the deceased's surviving cohabitant an exercise fraught with difficulty. That being the case, we believe that it is prudent to leave the intestacy rules alone, and to adapt the discretionary jurisdiction of the 1975 Act in order to achieve the necessary flexibility and to ensure broad fairness between competing applicants to the deceased's estate.
8.16 We accept that serious difficulties may exist as a result of the current degree of reliance being placed on the jurisdiction of the 1975 Act. It can be seen that problems of the kind outlined by the Deputy Official Solicitor could be resolved expeditiously were surviving cohabitants to obtain an automatic entitlement on their deceased partner's intestacy. However, as we have explained, it is not at all obvious what the precise extent of any such entitlement should be, and it would be difficult to quantify without reference to the position of other potential applicants who may be affected in some way.
8.17 We provisionally reject the view that cohabitants should have an automatic entitlement to a share of their deceased cohabitant's estate on intestacy. Do consultees agree?
FAMILY PROVISION
Criticisms of the law of family provision
8.18 As we have explained in Part 3,[13] the 1975 Act (as amended) provides a scheme for those who claim that the disposition of an estate (whether effected by will, by the intestacy rules, or by a combination of the two) has failed to make them reasonable financial provision. On proof of such a claim, the court may make orders designed to ensure that the applicants obtain such provision from the estate. Cohabitants can potentially apply under two categories: "dependants" and "cohabitants". The cohabitant category was introduced because of problems with the operation of the dependants' category, in particular since it excluded individuals who had provided full valuable consideration for their maintenance by the deceased.[14] However, as currently formulated, those two categories may between them fail to deal appropriately with all cases in which it would be proper for a remedy on death to arise.[15]8.19 For example, it may be argued that a cohabitant of less than two years' standing who has given birth to the parties' child ought, like cohabitants without children who can satisfy the two-year test, to be able to make an application for financial provision without having additionally to demonstrate dependency.[16] Although it may usually be possible to establish dependency in such cases,[17] it may be asked whether that ought to be a precondition of the claim. There might be a case for such cohabitants to be included automatically. It is proper to acknowledge that, in so far as the reported case law offers any guide to the operation of the Act,[18] some cohabitants do currently receive generous awards under the 1975 "maintenance" standard. However, such generosity is not uniformly displayed.
8.20 Where applicants do not fall within the "cohabitant" category because they cannot satisfy the minimum duration requirement they must instead claim as "dependants". But it is not always the most deserving applicants who receive awards: those who have given more than they have taken (for example, by devoting care and possibly financial support to an ailing partner) may not be able to claim because they were not dependent on the deceased.
8.21 Moreover, the basis upon which relief for the surviving cohabitant is provided may also be considered to be inappropriate. The 1975 Act currently provides applicants other than spouses and civil partners with a needs-based remedy: reasonable financial provision for their maintenance.[19] Where the deceased has not made a formal commitment to the claimant by marriage or civil partnership, it may be appropriate for needs-based remedies to be available in limited circumstances:
(1) where it can be inferred:
(a) from the passage of time (as is currently the case under the cohabitant category); or
(b) otherwise demonstrated on the facts (as is currently the case under the dependant and child of the family categories),
that the deceased did assume such a responsibility towards the claimant; or
(2) where the deceased ought by law to be rendered responsible for that person's needs (the child category[20]).8.22 As we discussed in Part 6, needs-based relief on separation between cohabitants may be difficult to justify as a matter of principle. While different considerations arguably arise in this context (for example where it is clear that the deceased had assumed a responsibility to maintain the applicant prior to death), it seems appropriate to ask the same question in relation to financial provision on death.
The implications for provision on death of a new claim on separation
8.23 Current law does not provide the cohabitant (or the dependant) with an inter vivos remedy, that is, a claim for financial relief exercisable against the other party should the relationship end during the parties' joint life-times. Only when death intervenes does a potential claim crystallise against the estate of the deceased. On the assumption that a new scheme of financial relief on separation were introduced for cohabitants as we provisionally propose, cohabitants would be able to claim whether their relationship ended by separation (under that new scheme) or on their partner's death (under the 1975 Act). Reviewing the basis on which the existing remedies on death are granted seems to us to be a natural corollary of considering adoption of a new scheme for financial relief on separation.[21]8.24 We consider it important to ensure that there is an appropriate level of consistency between any new scheme for financial relief on separation and financial provision on death. However, this is not to say that the same result should arise irrespective of whether the relationship was terminated by separation or by death: there might be very good reasons why a more generous award is appropriate in one case rather than the other.
8.25 The connection between remedies on death and separation is evident from the example of spouses. Spouses and civil partners are currently the only adult applicants under the 1975 Act who also have a potential family law claim[22] for financial relief on separation. The existence of that other remedy (ancillary relief) is reflected in the definition of "reasonable financial provision" under the 1975 Act in such cases: the court is required to have regard to the award that the survivor could have expected had the relationship ended by divorce[23] rather than death.[24]
8.26 In the absence of any equivalent claim on separation for the other categories of adult applicants under the 1975 Act, it may be appropriate for remedies on death for such applicants to be limited to needs-based relief. However, if financial relief on separation of cohabitants were introduced, a similar issue about the correspondence between the two remedies would arise. This may in turn raise questions about the suitability of the criterion of "need". As we discussed in Parts 5 and 6, need may not offer the most appropriate basis on which to provide relief between cohabitants on separation; nor may relief on separation be dependent for its justification on a clear assumption of responsibility. In view of our provisional rejection of a needs-based remedy on separation, this has obvious implications for the substantive basis on which financial provision on death is provided. The possibility of alternative rationales for relief is at least implicit in the 1975 Act's requirement that the court have regard to contributions made by the surviving cohabitant to the welfare of the deceased's family and to the duration of the relationship.[25] If any new scheme for financial relief on separation were not needs-based, then it might be desirable to revise both the basis on which remedies for surviving cohabitants are granted and the eligibility criteria for cohabitants' claims under the 1975 Act. It is to these issues that we now turn. We will also consider the impact of a death shortly after separation.
Consistency of definition of eligible cohabitant
8.27 In our view, the basic definition of "cohabitant" adopted for the purposes of eligibility to apply under any new statutory scheme for financial relief on separation should be carried through into the 1975 Act. In so far as the definition we recommend is different from that currently contained in the family provision legislation, we should recommend amendment of the 1975 Act accordingly.8.28 In Part 9, we explore what additional eligibility criteria might have to be satisfied before a cohabitant could claim under a new scheme on separation. We shall also examine in Part 9 the two-year minimum duration requirement applicable to all claims brought within the cohabitant category under the 1975 Act, even by cohabitants with children. As we shall discuss in Part 9, there might be grounds for adopting a less strict eligibility test (particularly as regards any minimum duration requirement) for the purposes of claims on death than for claims on separation. It may also be appropriate to dispense entirely with a minimum duration requirement in the case of cohabitants who had children. Whatever amendments were made to the 1975 Act, it would remain possible for a cohabitant who was dependent on the deceased to apply as a dependant if the eligibility criteria to claim as a cohabitant were not satisfied.[26]
"Reasonable financial provision"
THE MAINTENANCE STANDARD
8.29 Currently, the definition of "reasonable financial provision" relevant to cohabitants under the 1975 Act is "such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance".[27] This maintenance standard is applicable to all other applicants for provision under the 1975 Act with the exception of the spouse or civil partner of the deceased.[28]8.30 The maintenance standard applies at two stages. First, the applicant must show that the disposition of the deceased's estate effected by will or the intestacy rules or a combination of the two is not such as to make reasonable financial provision for the applicant.[29] Secondly, if this burden is discharged by the applicant, the court must determine whether and in what manner it should exercise its powers.[30] In so doing, the court cannot award to the applicant more than reasonable financial provision. However, it may award less than is required by the applicant for his or her maintenance, as in the exercise of its discretion the court has to have regard to a range of considerations such as the size and nature of the net estate and the competing claims of other applicants and beneficiaries.[31] If the net estate is not large enough in all the circumstances to cater for the "maintenance" demands of an applicant,[32] the court should make a more limited award.
8.31 In order to achieve consistency between financial relief on separation and financial provision on death, we consider that it would be necessary to ensure that the standard of reasonable financial provision applicable to cohabitants under the 1975 Act bore some relation to the criteria applicable to the quantification of claims by cohabitants for financial relief on separation. In so far as our provisional proposal is that financial relief on separation not be based on need, this would be likely to involve replacement of the maintenance standard and reference to a "separation analogy".
A SEPARATION ANALOGY
8.32 There is, of course, at present no general power in the court to grant cohabitants financial relief on separation.8.33 Under the current law, if an application is made by a spouse or civil partner of the deceased for reasonable financial provision under the 1975 Act, the court is required to have regard to the provision which the applicant might reasonably have expected to receive if, on the day on which the deceased died, the marriage,[33] instead of being terminated by death, had been terminated by divorce.[34] This so-called "divorce analogy" should not be given undue weight for, as the Court of Appeal has recently recognised, "there is self-evidently a profound difference between a marriage which ends through the death of one of the spouses, and a marriage which ends through divorce".[35]
8.34 It is now acknowledged that the divorce analogy is not the objective for the court in spousal claims, nor does it impose a ceiling on the award that may be made by the court. It is not "a starting point" for ascertaining what constitutes reasonable financial provision, but merely one of the factors to which the court is to have regard, albeit "a very important consideration and one which the statute goes out of its way to bring to the court's attention".[36]
8.35 The history of the divorce analogy is instructive. It was introduced by the 1975 Act, following the enactment of the Matrimonial Proceedings and Property Act 1970, which provided the basis of the law of ancillary relief as it applies on divorce today under the Matrimonial Causes Act 1973.[37] Until that point, remedies for spouses both on divorce and death[38] had been based on maintenance. When the new law of ancillary relief was introduced, it became apparent that unless the law of family provision for surviving spouses were amended, the divorced spouse potentially stood to gain more than the widow or widower, as the new law opened up the potential for remedies on divorce based on considerations other than need. The abandonment of the maintenance standard for spouses under the 1975 Act and the introduction of the divorce analogy therefore ensured that the surviving spouse was able to do at least as well as the spouse whose marriage ended on divorce.[39]
8.36 If we were to recommend the creation of a scheme for financial relief on separation, it would be possible for the first time for a court considering an application by a surviving cohabitant under the 1975 Act to consider what relief would have been likely to have been granted had the relationship ended by separation rather than by death. It seems to us that it would promote our objective of consistency between claims on separation and claims on death to introduce a "separation analogy" in relation to the 1975 Act. This separation analogy would serve the same purpose in relation to a cohabitant's claim as the divorce analogy does currently in relation to a claim by a spouse or civil partner.[40] It would therefore be neither the objective for the court in determining the cohabitant's application, nor the ceiling for the exercise of its powers. It would, however, be an important consideration for the court in deciding whether reasonable financial provision has been made, and, if not, what award should be made in favour of the applicant.
8.37 In so far as remedies on separation would not be available simply on the basis of the applicant's needs, this change to the 1975 Act would potentially give some applicants more generous provision than they are currently able to enjoy (in so far as maintenance currently forms a theoretical cap on what they may receive). Of course, this assumes that the available assets would be sufficiently extensive, in light of other claims, to provide the applicant with more than was necessary to cater for his or her needs in any event.
8.38 Conversely, abandonment of a maintenance standard in favour of a separation analogy, where remedies on separation were not needs-based, might potentially deprive some cohabitants of needs-based claims that they would otherwise have enjoyed under the 1975 Act (in the absence of a finding of dependency which brought them within the dependants category).[41]
8.39 Although need may not provide an appropriate basis for remedies on separation,[42] it may still be considered an appropriate basis in some cases for provision on death. It would be possible to incorporate the separation analogy in such a way as did not preclude the court from making needs-based awards on death if such an award seemed appropriate in all the circumstances.
OTHER CONSIDERATIONS FOR THE COURT
8.40 Currently, the court is specifically required to have regard to the applicant's age, the duration of the cohabitation, and the contribution made by the applicant to the welfare of the deceased's family, including any contribution made by looking after the home or caring for the family.[43] The reference to contributions may be particularly apposite if, following consultation, we decide to make recommendations for a statutory scheme of financial relief on separation in which such contributions would play a major role.
Former cohabitants
8.41 In the event of an application for financial relief being available to cohabitants on their separation, it would be logical to allow at least some former cohabitants to apply for provision under the 1975 Act as well as cohabitants. We need to distinguish between two categories of case: cases where death occurs after an application for financial relief has been made; and cases where death occurs after separation but before a claim had been made.
IMPACT OF DEATH ON AN EXISTING CLAIM FOR FINANCIAL RELIEF
8.42 A claim for financial relief on separation has obvious similarities to a claim for ancillary relief on divorce (or dissolution of a civil partnership). It is established law that the latter claim does not survive the death of either party to the divorce proceedings.[44] As a result, in the event of the respondent's death, the applicant who wishes to continue to seek a remedy must do so by means of an application under the 1975 Act.[45] We consider that the same principles should apply in relation to financial relief between cohabitants on separation. The claim should abate on the respondent's death, but the applicant should be able to pursue an application against the respondent's estate under the 1975 Act.[46]
DEATH AFTER SEPARATION BUT BEFORE A CLAIM HAS BEEN MADE
8.43 If cohabitants separated but, before either could make a claim for financial relief under a new scheme, one of them died, the survivor would not be entitled to make a claim under the separation scheme against the estate of the deceased. In such circumstances it would be equitable to allow the survivor to make an application under the 1975 Act, even though the parties were not cohabiting immediately before the death of the deceased.8.44 It would be necessary to impose limits on who could bring such a claim, lest a person who had cohabited with the deceased many years before his or her death should seek to capitalise on the death by bringing an unmeritorious application for family provision. Applying the same reasoning that has led us to propose this extension of the class of cohabitants, this could be dealt with by requiring that, in order to be eligible to apply for financial provision, the former cohabitant was, at the time of the death, entitled to bring a claim for financial relief on separation. In Part 11 we provisionally propose that a claim for financial relief should be made within one year of the parties' separation. It should follow that a claim under the 1975 Act by a former cohabitant should only be tenable where the applicant and the deceased separated within twelve months of the deceased's death. The usual time limit for claims under the 1975 Act (that they must be commenced within six months of the grant of probate or letters of administration) would then apply.
Barring applications under the Inheritance (Provision for Family and Dependants) Act 1975
8.45 The court has power, on granting a decree of divorce,[47] to make an order "if it considers it just to do so" to the effect that neither party shall be entitled to apply for an order under the 1975 Act in the event of the other's death.[48] This power is now routinely exercised. We think it would be sensible for the court, on making an order for financial relief on separation, to have a similar power restricting either cohabitant from subsequently making an application for family provision. In view of the restrictive limitation periods referred to above and discussed in Part 11, such a power would seldom need to be invoked, but it may be a useful precaution in certain cases. It would be unreasonable and unnecessary for a cohabitant who has received what a court considered was appropriate on separation from their former partner to make a claim against that partner's estate.
Opting out of the 1975 Act
8.46 If parties can opt out of any new remedies on separation, should they be able to opt out of the remedies available on death? There is currently no facility for any applicant to opt out of the 1975 Act as such, save by way of a consent order on divorce which includes a restriction under section 15 of the 1975 Act.[49] Any suggestion that a potential applicant should be permitted to opt out of the 1975 Act by private agreement therefore needs careful consideration.8.47 We have already explained why we think it is important that cohabitants should have the right to opt out of a statutory scheme for financial relief.[50] The reasons justifying that conclusion may apply with equal force to relief provided on separation and that provided on death. We can see that where two people want to live together but do not wish their relationship to give rise to the prospect of a legal claim under the 1975 Act in the event of the death of either of them, it may be thought that the parties' wishes should be respected. The motivation for such actions could be, for instance, a desire to provide for one's children on death in preference to one's partner. This may be particularly pertinent where the children are from a previous relationship.
8.48 At the same time, we should alert consultees to possible practical difficulties in the way of making such provision. As we have already explained, a cohabitant may bring a claim under the 1975 Act against the estate of their deceased partner either as a "cohabitant" or as a "dependant" of the deceased. It would be necessary to ensure, if an opt out were to be effective, that the person would not be able to claim under either of these heads. It would also be necessary to ensure that those opting out of a right to claim under the 1975 Act did so freely and with full knowledge of the consequences of their actions. We would anticipate that protections similar to those built into any scheme for opting out of financial relief on separation (and discussed generally in Part 10) would be required.
8.49 We consider that it would be appropriate for there to be some correlation between remedies available to eligible cohabitants on separation and on death. Do consultees agree?
8.50 We provisionally propose that, if a new scheme for financial relief for cohabitants on separation were enacted, then in relation to the Inheritance (Provision for Family and Dependants) Act 1975:
(1) the definition of cohabitants for the purposes of the 1975 Act should be amended to match the definition used under the new scheme;
(2) the definition of "reasonable financial provision" applied to cohabitants' claims under the 1975 Act should be reviewed to ensure consistency with the new scheme applying on separation;
(3) in determining a cohabitant's claim for provision under the 1975 Act, the court should be required to have regard to the provision that the applicant might reasonably have expected to receive in proceedings for financial relief on separation;
(4) the court should be entitled, on granting a cohabitant financial relief on separation, to direct that neither cohabitant should subsequently be entitled to make an application under the 1975 Act in the event of the other's death; and
(5) claims should be permitted under the 1975 Act on the same basis by those "former cohabitants" who cease to cohabit with the deceased in the twelve-month period immediately before the deceased's death.
Do consultees agree?
8.51 We invite the views of consultees as to whether cohabitants should be entitled to opt out of the right to claim financial provision under the 1975 Act against their partner's estate (whether as cohabitant or as dependant of their partner) in the event of their partner's death.
Claims by children
8.52 In Part 6, we considered the extent to which a cohabitant should be financially responsible, not only for his or her own children, but also for those of his or her partner. A similar question arises in relation to the 1975 Act.8.53 Claims may be made under the 1975 Act by:
(1) a child of the deceased;[51] and
(2) any person (not being a child of the deceased) who, in the case of any marriage or civil partnership to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage or civil partnership.[52]
For the purposes of exposition, we shall refer to (2) as "a step-child" of the deceased.[53] It is clear that "child" for these purposes identifies the relationship between the parties, so the applicant need not have been a minor at the time of death or, in (2), at the time of the marriage between the deceased and the child's parent.[54]
8.54 In either case, the claim to reasonable financial provision is based on the maintenance standard, that is the applicant is entitled to receive such financial provision as is reasonable in all the circumstances of the case for his or her maintenance.[55]8.55 There is a possible problem in relation to the class of step-children. The definition is, it will be noted, restrictive. Treating a child as a child of the family does not in itself suffice. The claim will only be possible if the deceased was married[56] (usually, but not necessarily, to the parent of the child concerned). If, therefore, A and B lived together and brought up C, B's child by a previous relationship, C would not be able to claim financial provision on A's death unless at some time A and B had been married to (or in a civil partnership with) each other.[57]
8.56 There have been few reported claims by step-children under the 1975 Act. It has become apparent, however, that the courts are prepared to give considerable weight to applicants' loss of their "inheritance" from their natural parent.[58]
8.57 In Re Callaghan,[59] the applicant's mother remarried following widowhood. The mother then predeceased her husband, who had in the interim treated the applicant as his child. The mother died intestate and her estate, which was not substantial, devolved in its entirety upon her husband. When the husband in turn died intestate, the intestacy rules benefited the husband's relatives and not the applicant. In Re Leach,[60] the applicant's father remarried following widowhood. The father then predeceased his wife, who had in the interim treated the applicant as her child. The father had made a will making his wife the sole beneficiary. When the wife died intestate, the intestacy rules benefited her relatives and not the applicant. In both cases, the applicants had been adult when the parent married and at the death of both their parent and step-parent.
8.58 In both cases, the applicants, having "lost their parents' inheritance", brought claims under the 1975 Act as step-children and obtained awards of reasonable financial provision from the court.[61] In neither case, it should be said, could the applicants have established dependency on their step-parents at the time of the step-parents' death.[62]
8.59 The claim in each of these cases was only possible because the applicant's parent had married the deceased. Had the widowed, now dead, parent merely cohabited with the new partner (the immediate deceased), then even if the applicant had been treated by the partner as a child of the family, no claim would have been possible. In the event of the applicant's parent dying and passing their estate to the partner by will, the applicant could have made a claim at that time as a "child of the deceased" (provided he or she could satisfy the maintenance standard). If the applicant had not made such a claim then, he or she could be prejudiced later. It would not be possible, in the event of the partner in turn dying and passing their estate to others by will (or on an application of the intestacy rules), for the applicant to claim against the partner's estate.
8.60 We are concerned by the disadvantage to which the children of unmarried cohabitants may be subject as a result of the restricted definition of "child of the family" in the 1975 Act. However, it is important to note that where the applicant can establish dependency upon the deceased partner - as may invariably be the case where the applicant was a minor being cared for by the deceased at the time of the death - a claim would currently be possible under the "dependant" category.[63] The difficulty arises only, therefore, in cases where such dependency cannot be demonstrated and so particularly, though not exclusively, in cases where the applicant "child" is adult.
8.61 We invite the views of consultees on whether the definition of "child of the family" contained in the Inheritance (Provision for Family and Dependants) Act 1975 should be amended so that those treated as children of the family in relation to a cohabiting couple should also qualify as applicants.
RULES IN RELATION TO WILLS
8.62 There are two rules we examine here as having particular relevance to cohabitants. First, we consider the revocation of a will by the testator's subsequent marriage, which may have unintended consequences where the testator marries, or enters a civil partnership with, an existing cohabitant who is the principal beneficiary of the revoked will. Secondly, we consider whether there should be rules denying testamentary benefits conferred upon and rescinding the appointment of executorship of a cohabitant of the testator following the parties' separation, by analogy with sections 18A and 18C of the Wills Act 1837.
The effect of marriage on a will
8.63 Subject to certain exceptions which we shall not dwell upon here,[64] a will is revoked by the marriage, or registration of civil partnership, of the testator.[65] This is important where cohabitants execute wills in favour of their partner, and they subsequently marry. If they are not aware of the operation of this rule, there is the danger of the will being revoked, thereby leaving the deceased intestate.8.64 The effect of the revocation rule is not restricted in its application to those who have been cohabiting prior to marriage or civil partnership. It is, however, the case that those who formalise an existing relationship by marriage or civil partnership, without adverting to the revocation rule, may suffer consequences which they did not intend. Those consequences may be redressed to some extent by the operation of the intestacy rules (under which the now-spouse will be the principal beneficiary of the estate as the deceased's surviving spouse) and possibly by a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (where the now-spouse will be entitled to the more generous standard of "reasonable family provision" applicable to spouses).
8.65 We do not believe that this is an appropriate opportunity to consider this issue as it is of much wider application than the scope of the current project. We also believe that there are practical steps that can be taken to publicise the marriage revocation rule to those (cohabitants or others) who are intending to marry or enter into a civil partnership.
8.66 We consider that there is no justification to amend the current law that (subject to exceptions) a will is revoked by the testator's subsequent marriage or civil partnership. Do consultees agree?
The effect of the separation of cohabitants on a will
8.67 Section 18A of the Wills Act 1837[66] provides that where a testator dies on or after 1 January 1996, and his or her marriage had previously been dissolved or annulled after a will had been made, any appointment of the former spouse as executor or trustee, or any conferment on the former spouse of a power of appointment, shall take effect as if the former spouse had died on the day of dissolution or annulment. Additionally, any property devised or bequeathed to the former spouse shall pass as if the former spouse had died on that date.[67]8.68 The divorce rule can be justified on the basis that by the time spouses are divorced, it is unlikely that they would wish their former spouse to receive testamentary benefits.[68] As the rule applies subject to any contrary intention appearing in the will, people can override the rule by making it clear in their will that, despite the impending divorce, they wish their former spouse to benefit. But it seems reasonable that the default position should be that the former spouse takes no benefit, and may not accept appointment as executor or as trustee.
8.69 The question arises whether a similar rule should apply in relation to cohabitants. If a testator has appointed his partner as the executrix of his estate, and has made testamentary gifts in her favour, their separation may mean that it is no longer appropriate or consistent with the testator's wishes for her to act as executrix or to obtain the gifts contained in his will.
8.70 However, the application of such a rule to cohabitants would not be free of difficulty. Marriage, civil partnership, divorce, annulment and dissolution are all matters of public record. Cohabitation, and the cessation of cohabitation by the separation of the parties, are not. It is important, therefore, to set out the implications of extending sections 18A and 18C of the Wills Act to cohabitants.
8.71 First, before the rule could be applied, it would be necessary to determine whether, at the time of the execution of the will, the testator was indeed cohabiting with his or her partner. The will may have been executed many years before the testator's death, and it may therefore be easier to assert than to prove that at the time of execution the relevant parties were indeed cohabitants. The partner is unlikely to be co-operative on this issue, as it would be contrary to the partner's interests to be found to have been cohabiting with the testator at the time of execution of the will. Secondly, it would be necessary to determine that, at the time of the testator's death, the parties were no longer cohabiting. We consider in Part 9 below the issues that may be involved in proof of separation. Again, this is a matter on which there is likely to be conflicting evidence, and we would anticipate a serious risk that the deceased's partner and the deceased's estate would hold opposing views.
8.72 From the point of view of those administering the deceased's estate, and those who are recipients of the deceased's bounty, requiring an examination of the testator's domestic circumstances (both at the time of the execution of the will and at the time of the death) could be time-consuming and costly. It may, of course, be contended that this project is by definition dealing with informal relationships for which there is no readily available proof of commencement or termination. If we acknowledge that there is a need for reform then we should make recommendations accordingly.
8.73 The problem of informality could be mitigated, albeit only in part, by making some event other than separation the trigger for the application of the rule. For instance, it may be sufficient for a separation agreement to have been entered into by the parties, or for proceedings for financial relief on separation to have been instigated by one or other of the partners, or for an order for financial relief to have been made by the court. Any of these would provide ample indication that the parties no longer wished to consider themselves as a couple. Not only would such evidence indicate that the relationship had broken down, it would also indicate that at some past date (although not necessarily at the date of the execution of the will) the parties were cohabiting.
8.74 On balance, however, we do not consider that the application of this rule to cohabitants is desirable. We can see that in certain cases, where the will was executed many years ago and may have been forgotten by the time of separation, or where the deceased had not been in receipt of legal advice, application of the rule may have beneficial effects. But it seems to us that, in the large majority of cases, testators who separate from their partner would take steps to ensure that their former partner no longer benefits from provisions contained in their will. We think that to introduce a provision dealing with the minority of cases where a testator fails to take such steps would be a disproportionate response to the problem, having regard in particular to the possibly adverse impact of any such rule on the administration of estates.
8.75 We consider that there should be no equivalent provision to sections 18A and 18C of the Wills Act 1837 applicable where, subsequent to the execution of a will, a testator separates from a person with whom he was cohabiting and whom he appointed as executor or trustee, or devised or bequeathed property, in the terms of the will. Do consultees agree?
Note 1 The children may be the children of both parties, or the children of M by a previous relationship. If M is not their father, they would have no entitlement themselves on intestacy, and they would not be the appropriate respondents to an action by W under the 1975 Act. [Back] Note 2 We discuss eligibility in detail in Part 9. [Back] Note 3 Wills, Probate and Administration Act 1898 (New South Wales), s 61B(2), Administration and Probate Act 1970 (Northern Territory), sch 6, part II(a), and Administration and Probate Act 1935 (Tasmania), s 44(3B). In the Northern Territory and Tasmania, this does not apply where the intestate leaves issue. [Back] Note 4 Intestate Succession Act 2000 (Alberta), Estate Administration Act 1996 (British Columbia), Intestate Succession Act 1989-1990 (Manitoba) and Intestate Succession Act 1996 (Saskatchewan). [Back] Note 5 Administration Act 1969 (New Zealand). [Back] Note 6 Distribution on Intestacy (1989) Law Com No 187. See also Distribution on Intestacy (1988) Law Com Working Paper No 108. [Back] Note 7 Distribution on Intestacy (1989) Law Com No 187, at para 58. [Back] Note 8 Distribution on Intestacy (1989) Law Com No 187, p 15, n 92: In the situation where the intestate is survived by a cohabitant and sibling, 83% of the respondents in the public opinion survey considered that the cohabitant should have a share in the estate. The British Social Attitudes Survey in 2000 also found overwhelming support (93%) for the proposition that, in the event of intestacy, a surviving cohabitant of a ten year relationship without children should have the same right to remain in the home following the partner’s death as a spouse: A Barlow, S Duncan, G James and A Park, “Just a piece of paper? Marriage and cohabitation”, in A Park, J Curtice, K Thomson, L Jarvis and C Bromley (eds), British Social Attitudes: the 18th Report (2001), pp 48-49. [Back] Note 9 The Effects of Cohabitation in Private Law (1990) Scottish Law Commission Discussion Paper No 86. [Back] Note 10 Report on Family Law (1992) Scot Law Com No 135, para 16.24 and following. [Back] Note 11 The Scottish Law Commission is currently conducting a review of the law of succession in Scotland. Information about the project is available on their website: http://www.scotlawcom.gov.uk/html/cpsuccession.htm (last visited 4 May 2006). [Back] Note 12 Family Law (Scotland) Act 2006, s 29. The Act also departs from the recommendations of the Scottish Law Commission in that it does not list the factors to which the court is to have regard in considering such a claim. [Back] Note 14 See Distribution on Intestacy (1989) Law Com No 187, Part IV. [Back] Note 15 There has to date been no empirical study of the operation of the Inheritance (Provision for Family and Dependants) Act 1975 as it applies to cohabitants. Any criticism of the current position can therefore only be based on an analysis of the statutory provisions and decided case law, which is not necessarily representative of all of the claims which are in fact made, and of course do not disclose the circumstances of those who might have wished to make a claim but found themselves unable to do so. [Back] Note 16 See facts such as those in Kotke v Saffarini [2005] EWCA Civ 221, [2005] 2 FLR 517, (a case under the Fatal Accidents Act 1976, where there is no catch-all “dependant” category to save those who fail to satisfy the two-year cohabitation test; cf recommendations made in Claims for Wrongful Death (1999) Law Com No 263, para 3.46). The child would, of course, have a remedy in his or her own right, but (like the remedies supplied by the Children Act 1989, sch 1) that remedy would not be directed at dealing with the economic impact of child-care for the surviving parent. We discuss the case further below at 9.38. [Back] Note 17 Recent cases take a generous approach, even where the cohabitants have no children: eg Churchill v Roach [2002] EWHC 3230 (Ch), [2004] 2 FLR 989, 1005. [Back] Note 18 See n 15 above. [Back] Note 19 Inheritance (Provision for Family and Dependants) Act 1975, s 1(2)(b). [Back] Note 20 The courts have been more restrictive in their treatment of claims by adult children, in relation to whom no lifetime support obligation may be owed. [Back] Note 21 Compare the review of spousal provision under the family provision legislation following the introduction of current ancillary relief law on divorce, which bore fruit in the Inheritance (Provision for Family and Dependants) Act 1975: Second Report on Family Property: Family Provision on Death (1974) Law Com 61. [Back] Note 22 As opposed to some claim under the general law of trusts and so on. [Back] Note 23 Or dissolution, in the case of civil partners. [Back] Note 24 Inheritance (Provision for Family and Dependants) Act 1975, s 3(2). [Back] Note 25 Inheritance (Provision for Family and Dependants) Act 1975, s 3(2A). These factors, and the survivor’s age, also apply to applications by spouses and civil partners: Inheritance (Provision for Family and Dependants) Act 1975, s 3(2). [Back] Note 26 Inheritance (Provision for Family and Dependants) Act 1975, s 1(1)(e), for which no minimum duration requirement exists, and which may currently provide access to the Act for many cohabitants with children whose relationship with the deceased lasted less than two years. [Back] Note 27 Inheritance (Provision for Family and Dependants) Act 1975, s 1(2)(b). [Back] Note 28 Inheritance (Provision for Family and Dependants) Act 1975, s 1(2)(a), applicable to spouses and civil partners of the deceased save where they are judicially separated at the time of the death. [Back] Note 29 Inheritance (Provision for Family and Dependants) Act 1975, s 1(1). [Back] Note 30 Inheritance (Provision for Family and Dependants) Act 1975, ss 2, 3. [Back] Note 31 Inheritance (Provision for Family and Dependants) Act 1975, s 3(1). [Back] Note 32 Or if the court considers that it is necessary in achieving a proper balance between competing applicants to the estate that those demands are not met in full. [Back] Note 33 Or civil partnership. References to marriage should be taken to include civil partnerships, and references to divorce should be taken to include dissolution of civil partnership. [Back] Note 34 Inheritance (Provision for Family and Dependants) Act 1975, s 3(2), excepting judicially separated spouses and civil partners. [Back] Note 35 Cunliffe v Fielden [2005] EWCA Civ 1508, [2006] 2 WLR 481, at [30], per Wall LJ. [Back] Note 36 Re Besterman (Deceased) [1984] 1 Ch 458, 469, per Oliver LJ, as later followed with approval in Re Krubert (Deceased) [1997] Ch 97, 104, per Nourse LJ, and P v G, P and P (Family Provision: Relevance of Divorce Provision) [2004] EWHC 2944 (Fam), [2006] 1 FLR 431, at [223]-[227], per Black J. The comments of Waite J in Moody v Stevenson [1992] Ch 486, 503, seeking to elevate the importance of the divorce analogy were not followed in these later cases. [Back] Note 37 As amended by the Matrimonial and Family Proceedings Act 1984. [Back] Note 38 Under the Inheritance (Family Provision) Act 1938. [Back] Note 39 See Second Report on Family Property: Family Provision on Death (1974) Law Com No 61, paras 28 and 34. [Back] Note 40 Inheritance (Provision for Family and Dependants) Act 1975, s 3(2). [Back] Note 41 Though note also that in many cases, the applicant’s needs would in practice be catered for by an award made under the principles of economic advantage and disadvantage that we propose in Part 6. [Back] Note 42 For the reasons discussed from para 6.62. [Back] Note 43 Inheritance (Provision for Family and Dependants) Act 1975, s 3(2A). Equivalent factors apply to cases involving a surviving spouse or civil partner. [Back] Note 44 D’Este v D’Este [1973] Fam 55. [Back] Note 45 On the assumption that the deceased has not made reasonable financial provision for the applicant. It may of course be (1) that the deceased left a will in favour of the applicant which remains valid (and, as the parties had not been divorced, was not affected by the provisions of Wills Act 1837, s 18A); or (2) that the deceased died intestate and the applicant as surviving spouse inherited the entirety, or the most part, of the estate. [Back] Note 46 Assuming that the relevant jurisdictional rules are satisfied: see Part 11. [Back] Note 47 Or a dissolution order, in the case of civil partnerships. [Back] Note 48 Inheritance (Provision for Family and Dependants) Act 1975, s 15(1). Such an order can also be made when the court grants a decree of nullity or judicial separation. In relation to civil partners, see s 15ZA(1), inserted by the Civil Partnership Act 2004, sch 4, para 21. [Back] Note 49 See Family Property Law (1971) Law Commission Working Paper No 42, paras 3.66-3.68 and Second Report on Family Property (1974) Law Com No 61, paras 185-188. Spouses cannot oust the jurisdiction of the court under the 1975 Act by agreement: Re S (Deceased) [1965] P 165; Re M (Deceased) [1968] P 174, this is an application of the public policy enunciated in Hyman v Hyman [1929] AC 601. [Back] Note 51 Inheritance (Provision for Family and Dependants) Act 1975, s 1(1)(c). [Back] Note 52 Inheritance (Provision for Family and Dependants) Act 1975, s 1(1)(d), as amended by the Civil Partnership Act 2004, sch 4, para 15(4). [Back] Note 53 The concept of “child of the family” extends beyond that category to include children of whom neither the deceased nor his partner was a parent, but it is in the case of step-children in particular that the problem of “lost inheritance”, discussed in the text below, particularly arises. [Back] Note 54 Re Callaghan [1985] Fam 1. [Back] Note 55 Inheritance (Provision for Family and Dependants) Act 1975, s 1(2)(b). [Back] Note 56 Or a party to a civil partnership. [Back] Note 57 Unless C can demonstrate dependency on A and so apply as a “dependant” of the deceased under Inheritance (Provision for Family and Dependants) Act 1975, s 1(1)(e). [Back] Note 58 This concept may be thought to be problematic in English law (contrast other, civilian jurisdictions), which does not confer any right to a fixed inheritance on any category of family member. See First Report on Family Property: A New Approach (1973) Law Com No 52, paras 31-45; it was never even proposed for children. [Back] Note 61 Although it may be thought that the applicants, in both cases relatively self-sufficient adults, would find the maintenance threshold difficult to surmount, the courts were sympathetic to their plight. [Back] Note 62 So no claim as a “dependant” of the deceased would have been possible under Inheritance (Provision for Family and Dependants) Act 1975, s 1(1)(e). [Back] Note 63 Inheritance (Provision for Family and Dependants) Act, s 1(1)(e). [Back] Note 64 Revocation will not take place where it appears from the will that at the time it was made, the testator was expecting to be married to his partner, and it is shown that the testator intended that the will (or some provision within it) should not be revoked by the expected marriage. [Back] Note 65 Wills Act 1837, s 18 (spouses), and s 18B (civil partners), as inserted by the Civil Partnership Act 2004, sch 4, para 1, 2 and 5. [Back] Note 66 Civil partners are covered by an equivalent provision: Wills Act 1837, s 18C, inserted by the Civil Partnership Act 2004, sch 4, para 1, 2 and 5. For the purposes of exposition, the text refers only to spouses. [Back] Note 67 Wills Act 1837, s 18A (spouses), and s 18C (civil partners). An earlier provision (contained in Administration of Justice Act 1982, s 18(2)) continues to apply where testators died on or after 1 January 1983 and on or before 31 December 1995. This provision (deeming a “lapse” of a gift in favour of the former spouse) was criticised following the decision of the Court of Appeal in Re Sinclair [1985] Ch 446 and the Law Commission recommended its amendment: The Effect of Divorce on Wills (1993) Law Com No 217. [Back] Note 68 Royal Commission on Marriage and Divorce (1956) Cmnd 9678 (Morton Commission), at paras 1187-1191. [Back]
