The Call for Statutory Amendment in the of Inheritance Act 1975 - Case Study Example

The Call for Statutory Amendment: The Case of Inheritance (Provisions for Family and Dependants) Act 1975 Introduction In earlier years, testamentary freedom was the chief feature of English and Wales law of succession (Schaul-Yoder, 1985, p.206 and 207). However, since the repeal of the (Family Provisions) Act 1938 by the inheritance (provision for family and dependants) Act 1975, things have shifted significantly. With the changing societal dynamics, the Act has widened the scope of the claimants to include cohabiting partners and same gender partners among others (ss.1 (1)(a),1(1)(ba) and 1(1)(e)). Despite of all these advancement so as to ensure fairness, The Law Commission (2007, p. 1 & 2) made a recommendation for enactment of specific law that deals with cohabitants (property rights and financial provisions) when separated or deceased. The aim of this paper is to critically evaluate the recommendation by Law Commission in relation to cohabiting spouses and enactment of property rights and financial provisions Act specifically for them. To answer this question the paper will approve or disapprove the fact that “the inheritance (Provisions for Family and Dependants) Act 1975 provides more than adequate mechanism for protecting the interest of cohabitants on the death of a partner where there is no will”. The Current Situation and the Commission’s Recommendations: A Comparative Approach to the Normative Perspective Estates Act 1925 provides how an estate of a deceased should be administered (Law Commission Consulation Paper 191, p.17) while inheritance Act 1975 enables relatives and other to dispute mode and manner of estate distribution under intestacy and testacy (Law Commission Consulation Paper 191, p.23). As already noted earlier, (ss.1 (1)(a),1(1)(ba) and 1(1)(e)) had been introduced to cater for diverse interest of numerous sub category of people owing to societal dynamics and the need to entrench fairness into the society. s.1 (1) (e) states that “any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased”. Under the act, (s.2) allows cohabiting partner to make claim to the probate registry for a grant of letters of administration when the partner dies intestate or stake a claim to the administrators/ executors of the deceased if they feel they have not been adequately catered for in the will or intestacy provisions. The question that lingers in one’s mind then has the court been following this to alter or do they create numerous implied terms that do not favour cohabiting partners when claiming financial provisions. Law Commission Consulation Paper 191 (p.1) observes that inheritance is a difficult subject and that not everyone makes a will and even if there is a will interested parties might be dissatisfied and thus, free to seek court indulgence. Barlow (2004, p.61) indicates that Britain has remained confused in relation to changing social norms. She notes that the statutory reforms have not been at par with societal dynamics while case laws have not been adequate to address the same. This is incomparable to other countries with common law jurisdiction like New Zealand, Australia and Canada. Indeed, this observation was echoed by Lord Lester of Herne Hill (2012) who noted that England and Wales lag behind as compared to Scotland and Republic of Ireland who have enacted laws in relation to financial rights of those who were in cohabitation. The bias against cohabitants is expressly expressed by the government when it states that the preferred parent structure is marriage. According to Great Britain-Home Office (1998, p.31 at para 4.8) “marriage does provide a strong foundation for stability for the care of children. It also sets out rights and responsibilities for all concerned. It remains the choice of the majority of people in Britain. For all these reasons, it makes sense for the Government to do what it can to strengthen marriage”. However, the hallmark of confusion arises when in the same document they present a differing picture which highlights confusion. Great Britain-Home Office (1998, p.30 at para 4.2) acknowledges the fact that “families do not want to be lectured about their behaviour or what kind of relationship they are in”. Barlow (2004, p.58 citing DTI. Women and Equality Unit 2003b: paras. 3.5-3.6); (Law Commission, 2007, p.6) notes that the only effort government has made is the realisation of providing such couples with better information. To create comparison, it is prudent to examine the recommendations made by the Law Commission and the rationale behind these recommendations. To present the dynamics in relation to these recommendations, the paper will present in brief starting from scenario building to observation and conclusions made. The Law Commission (2007, p.2) identifies the fact cohabitation is expected to be more prevalent. This is highlighted by the demographic trends and the people’s attitude towards the same (p.4 & 6). Law Commission (2007, p.7, para. 1.18 and p.9, para. 1.27) acknowledges that there is difficulty for those who are cohabiting while making claims after separation or when one partner is deceased. This glaring concern is equally highlighted by Law Commission Consulation Paper 191 (p.32, para. 2.74) which notes that “meaning of “reasonable financial provision” is limited, for cohabitants, to what is required for maintenance”. In this context, cohabitants can only sue for maintenance and not estate administration. In a nutshell, we can conclude that there is uneven playing ground in relation to inheritance rights for those who are in cohabitation arrangement in England and Wales. Does it Provide Adequate Mechanisms for Cohabitants? Case Laws Review: The Subjective Approach Based on these two extreme positions in the continuum, it would be prudent to examine how courts in Wales and England have been interpreting the same laws so as to determine the application made by a cohabiting partner who has been deceased. In doing so, the paper appreciates the fact that in law we have the normative perspective as written in the legislation/ express terms and the subjective perspective based what is implied by the judges. These observations can then allow one to establish by accepting or refuting the fact that “the inheritance (Provisions for Family and Dependants) Act 1975 provides more than adequate mechanism for protecting the interest of cohabitants on the death of a partner where there is no will”. An example of unfair outcome which would have been solved by a reformed statutory system is the Stack v Dowden case. In this case, the court had to determine two issues. The first is whether a standard form of words used in property transfers to more than one person constituted express declaration of trust, creating a beneficial joint tenancy and if it didn’t how best the beneficial interests could be ascertained. The majority held that in a “domestic” or “consumer” context where property is conveyed to more than one person (thereby creating joint ownership at law, by way of a “joint tenancy”), there is a strong presumption that the parties are beneficial joint tenants.10 Accordingly, if the parties separate and unless the presumption is rebutted, each will be entitled to an equal share of the proceeds of any sale (after any outstanding mortgage loan has been repaid). However, Stack v Dowden was held to be one of those very unusual cases in which the presumption could be rebutted. Their Lordships were persuaded that there was evidence that the parties intended to hold the beneficial interest in unequal shares, which corresponded closely to their respective financial contributions to the acquisition of the property (Stack v Dowden cited in The Law Commission, 2007, p.18 and 19). On the other hand, there are rulings that have been made that favour cohabitants in relation to estate administration. In the case of Negus v Benhouse, the court moved away from the objective standards of what is reasonable to subjective standards. In the case the court awarded the applicant 540 thousand pounds out of an estate worth 2.2 million pounds. However, such case presents equally another weakness. The weakness is that those cohabiting pa8rtner who are likely to benefit if the law is not reformed are those rich partners who are cohabiting. Since the ruling shows that when the rich partners are cohabiting subjective standards is applied and when it is the average or the poor then the standard objective approach is applied (Law Commission Consultation Paper 191, p.32 and 33). Discussions From the above observation, two mixed reactions can be drawn. In certain instances like Negus v Bahouse the courts have been liberal enough to award estate to a cohabiting partner. However, in overall comparative observation, there is need for a clear overhaul on statutory legislations dealing with estate administration in relation to cohabiting partner. The case law of Stack v Dowden points to this concern. Therefore the rallying call is that the house of the lords can’t be accused for their shortcomings instead, the legislative gaps that exist as a result of societal dynamics are what should be addressed. The emerging finding is that the inheritance (Provisions for Family and Dependants) Act 1975 doesn’t provide more than an adequate mechanism for protecting the interest of cohabitants on the death of a partner where there is no will. Therefore, the paper concurs with the recommendation by the Law Commission about enacting or passing the law dealing with cohabiting partners in relation to property rights and financial provisions. Conclusions The aim of this paper was to critically evaluate the recommendation by Law Commission in relation to cohabiting spouses and enactment of property rights and financial provisions Act specifically for them. To answer this question the discourse evaluated supporting evidence against and for based on case laws and other academic literatures and report in relation to the current inheritance (Provisions for Family and Dependants) Act 1975 so as to prove whether it provides more than adequate mechanism for protecting the interest of cohabitants on the death of a partner where there is no will or not. The finding was that there is minimal protection. However, there is lot if England and Wales legislations are to keep abreast with family dynamics. Therefore, the paper recommends for a new Act that will cater for people cohabiting in relation to property rights and financial provisions. References Government Publications Great Britain-Home Office (1998). Supporting Families: A Consultation Document. London: Stationery Office. The Law Commission. The Law Commission Consultation Paper No. 191: Intestacy and Family Provision Claims on Death. Available at: http://lawcommission.justice.gov.uk/docs/cp191_Intestacy_Consultation.pdf. The Law Commission (2007-Law Com No 307). Cohabitation: the Financial Consequences of Relationship Breakdown. Available at: http://www.justice.gov.uk/lawcommission/docs/lc307_Cohabitation.pdf. Journals Barlow, A. (2004). Regulation of Cohabitation, Changing Family Policies and Social Attitudes: A discussion of Britain within Europe. Law and Policy 26 (1): 57-86. Schaul-Yoder, R. (1985). British Inheritance Legislation: Discretionary Distribution at Death. Boston College International and Comparative Law Review, 8 (1): 204-236. Legislations and Bills England and Wales Administration of Estates Act 1925. House of Lords-Lord Lester of Herne Hill (2012). Inheritance (cohabitants) Bill [HL] Second Reading. Available at: http://www.publications.parliament.uk/pa/ld201213/ldhansrd/text/121019-0001.htm. Inheritance (Provision for Family and Dependants) Act 1975. Case Laws Negus v Gordon Charles Bahouse & Anor [2007] EWHC 2628 (Ch) (23 October 2007) Stack v Dowden [2007] UKHL 17 Read More