The Rights of Cohabitating Partner in Intestacy - Case Study Example

Equity and Trust and Cohabitation The Rights of Cohabitating Partner in Intestacy In UK, if an individual dies inte then his cohabiting associate does not have any automatic privilege to inherit the estate of the deceased. Alternatively, the estate will be divided employing a complex process as prescribed the law. This is regardless of duration of their relationship, and, even if they had children together. With effect from 1st February 2009, new statutory legacies were introduced. For a civil partner / or a spouse with children- if a person dies intestacy, and if his net estate is not more than £ 250,000, and if the civil partner /spouse has survived more than 28 days of the deceased , then he is entitled to receive whole of £ 250,000 or less. If the net estate is more than £ 250,000 , then , the first £ 250,000 together with the personal possession to civil partner/spouse. Fifty percent of the balance should be equally shared among kids. The civil partner /spouse will also have the right to the interest on the balance amount of deceased estate during his life time only, and then children of the civil partner /spouse will receive the same in equal shares after the life time of the civil partner or spouse. (www.graysons.co.uk). In case of intestacy, if the claimant is not a registered civil partner or married, then he may not get a share in the deceased property automatically. If the deceased has not provided for the cohabitating partner in some other way, then such partner can make a claim under the provisions of the “Inheritance (Provision for Family and Dependents) Act 1975.” In case of cohabitation, the surviving partner has to demonstrate that she or he had maintained either partly or wholly by the deceased. Further, a cohabitating partner has to make the claim within the 6 months from the date of the issue of letters of administration. (www.direct.gov.uk) The position of children’s of cohabitated couple is somewhat awkward under U.K laws. Schedule 1 to the Children’s Ac 1989 offers power to the courts to order some financial relief for the advantage of children despite the status of the parent’s affiliation.(Barrington, A,2001). Stack v Dowden This case was about the rights over a property over which cohabitation partners lived together before their separation. This case codifies new structure within which cohabitant rights are to be decided and will pave to greater simplicity and certainty for future cases. In this case, the cohabitant couples separated after having four children. There was one residential place, which was co-owned by them and a suit was filed the estranged male partner for equal division. Finally, the House of Lords upheld the Court of Appeal’s ruling that Ms Dowden was entitled to 65% and Mr. Stack to 35% House of Lords might have given higher share to female partner on considering the factor that she had four children and also contributed substantially for the purchase of that house. (www.publications.parliament.uk). In this case, Pauline Jonathan will be the legal heir of Jonathan Reisberg as she is the daughter of Jonathan’s erstwhile wife. In the problem, it has been stated that they were in separation for the last fifteen years and there is no mention about a divorce. Since Lorraine Lexington is a cohabitating partner, either she or his children have no legal rights to inherit Jonathan’s estate as he died intestate. Lorraine Lexington, as a cohabitating partner can make a claim under the provisions of the Inheritance (Provision for Family and Dependents) Act 1975. The triplets can seek relief under Schedule 1 to the Children’s Ac 1989 offers power to the courts to order some financial relief for the benefit of children despite of the status of the parent’s relationship. Validity of a Cheque under UK Laws Under UK laws, there is no definite guideline about the validity of a cheque. Banks in UK normally will refuse to honour the cheques if it is more than six months old. However, it is at the discretion of the bank that deals with it. Cheques will have a validity period of six years, unless if the drawer makes a stop payment order. Further, one cannot stop the cheque that is supported by a cheque guarantee card. So as to protect the payer, it is a common practice in UK to reject the cheques that is over six months old. This is mainly on the presumption that either the cheque might have been stolen or lost or payment might have been made already. However, the validity of a cheque depends upon the discretion of the individual banks. However, the cheque £25,000 can be encashed by the children if the bank allows the same under its discretion as Jonathan’s uttering in the party had been recorded on a digital video camera, and this can be produced as an evidence of Jonathan’s intention . Equity and trust In Milroy v Lord1, where about 50 shares had been assigned under a voluntary deed upon the trust for Milroy’s benefit to Samuel Lord. However, in the company books, there was no transfer of the shares was registered as per requirements under Companies Act. It was argued by Milroy that a trust has been established, and that he had hence got an equitable proprietary right in the shares. It was held by the court that the ineffective transfer does not create a declaration of trust without, there being a concise thinking to create a trust in that way. Moreover, to make a voluntary settlement a valid one and effective, the settlor must have carried out everything, which was needed to be done to convey the chattels and make the settlement obligating upon him. The settlor duty is not only to covenant to alienate a property, but he should also have performed in the style proper for the property concerned. Hence, it was held that there was no such transfer as shares had not been registered. In T Choithram International SA v Pagrani2 , a settlor of a trust failed to constitute a trust in a proper form. In such scenarios, the court will elect to give effect to the deceased’s intentions rather than have a trust whose valuable property fall into the residue just to benefit the residuary legatees. In Mascall v.Mascall3, a father initially intended to transfer his land to his son and completed all the legal formalities in this case but wanted to rescind from this as he had a brawl with his son. It was held by the Court of Appeal since the father had completed all legal formalities, he had to transfer the property, and hence, he was not entitled to retreat on the transfer. As regards to shares to be transferred legally under the statute to a trustee by a settlor, who is to be vested with the legal title in those shares, it is obligatory to registering the shares in the name of the trustee or beneficiary as they are vested with the legal titles in those shares. (Hudson2009:186). Under “s 53(1) (b) of the Law of Property Act 1925, a declaration of trust “as regards to property must adhere with section’s provision. “A declaration of trust as regards to any interest in any land or land itself must be apparent and established by some individuals in writing who is able to declare such by his will or by such trust.” Thus , in case of any land , the settlor need not necessarily to establish such a trust, and it is enough if he demonstrates that if there is something in writing, which is signed by the settlor which will act as an evidence that a trust has been established. Else, a settlor can settle the property through a provision in a Will. However, when a trust is established by means of constructive or resulting trust, then formalities of transferring a property does not arise. Once a trust is created over any land, then the provisions of the “Trusts of Land and Appointment of Trustees Act 1996” will be applicable and there will be some commitments on the part of trustees, the privileges of beneficiaries to otherwise deal with the land or to occupy the property and in some scenarios, a court can order the sale of the property by the court. (Hudson2009:179). A settlor may announce himself as a trustee of the property for the relevant donees. This is called as a “self-declaration of trust.” In this case, the author has to mention the conditions of the trust. There are three requisites to decide whether a valid declaration of trust has been established by the settlor. The three essential requisites are object, subject matter, which includes beneficial interest and certainty of intentions. As a further requirement, a settlor is needed to adhere with such statutory formalities, if any, as regards the declaration of the trust and to the transfer of the property to the trustees. (Ramjohn 2008:15). In Milroy v Lord, the settlor had not done anything in his authority to transfer the shares to the transferee. Hence, it was held that gift was incomplete and the targeted donee as a volunteer was not capable of implementing the envisaged settlement. In this case, so as to transfer the equitable interest in shares, the settlor was needed to advise Mr. Lord, the power of attorney holder to transfer the shares to himself. (Lord). However, the settlor could have made a direct transfer of the shares to Lord by executing relevant transfer documents. The settlor in this case did not do any of these and merely delivered the share certificates to Lord and just executed a power of attorney in favour of Lord. This was construed as a deficient demeanour of the part of the settlor. (Ramjohn 2008:19). Shares gifted by Jonathan cannot be transferred in the trust’s name as the share transfer formalities have not been completed. Lorraine can approach a court to issue an order to transfer the shares in her favour. However, the court will give due regard to rights of Titiana Borgia- Mafioso also. Further, the property Greenacre can be conveyed to Reisberg Trustee Co Ltd as it is a self-declaration of trust by Jonathan. Conclusion: In the judgment Stack v Dowden, there were references to the necessity for new legislation to resolve the issues which arise in this type of cases. Further, Lord Hope observes that the problem surrounding instituting the rights to property for the cohabitating couple has yet to be resolved by legislation. Lord Hope also observed that it is really pity that legislation that applies to divorcing couples is not applicable to the unmarried cohabitation. It is the time for the administration to legislate new rules safeguarding the rights of cohabitated partner who had separated and is having children or whose partner passed away without writing a Will or in intestates. List of References Hudson Alastair. (2009). Equity & Trusts. London: Routledge Taylors and Francis Group. Ramjohn Mohamed. (2008). Text, Cases and Materials on Equity and Trusts. London: Taylors and Francis. www.direct.gov.uk. (2011). What to do if there is no Will. [online] available from http://www.direct.gov.uk/en/Governmentcitizensandrights/Death/Preparation/DG_10029802 > 14 May 2011. www.graysons.co.uk. (2011). The Laws of Intestacy. [online] available from 14 May 2011 www.theanswerbank.co.uk. (2011) Cheques. [online] available from< http://www.theanswerbank.co.uk/Business-and-Finance/Personal-Finance/Question583598.html> 14 May 2011. Barrington, A. Entry into parenthood and the outcome of cohabiting partnerships in Britain, Journal of Marriage and the Family,63, Issue 1:2001:80-96. www.publications.parliament.uk. Judgement –Stack v. Dowden. [online] available from< http://www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd070425/stack-6.htm> 14 May 2011. Read More