Inheritance and Trustees' Powers Bill [HL]
The Inheritance and Trustees’ Powers Bill [HL] is based substantially on a draft bill prepared by the Law Commission. It is following the special procedure which applies to Law Commission bills. The Bill is a technical Bill which would amend aspects of the law of intestacy and family provision claims; and the statutory powers of trustees in all trusts.
A person dies “intestate” if (s)he does not leave a valid will disposing of the whole of his or her property, in which case their estate is distributed in accordance with legal rules known as the intestacy rules. In distributing the estate, much depends on which relatives survive the deceased and the size of the estate. According to the Law Commission, “studies suggest that between a 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 Inheritance (Provision for Family and Dependants) Act 1975 provides a means for someone to challenge the distribution of an estate, under a will or under the intestacy rules, by applying to court for a share, or an increased share, in the estate. This is often referred to as a claim for family provision. A successful claim results in a change to the way in which the estate is distributed.
In October 2008, the Law Commission began work on a project dealing with intestacy and family provision claims on death, which culminated, in December 2011, with the publication of a final report, including two draft Bills (one of which related to inheritance rights for cohabitants). The report recommended a package of reforms “that would modify the current legal rules to reflect modern social expectations and to remove arbitrary or unduly technical aspects, while leaving intact the fundamental structure of the English law of “succession” to property on death”.
On 21 March 2013, Lord McNally, then Minister of State for Justice, announced that the Government had accepted the Law Commission’s recommendations, with minor amendments, in all areas except for the recommendations relating to rights for cohabitants on intestacy, and published its own consultation on the Law Commission’s draft Inheritance and Trustees’ Powers Bill. The response to this consultation was published on 30 July 2013. This indicated that, although some respondents had concerns about some points of detail, and a range of differing views was put forward with regard to an additional ground for jurisdiction for family provision claims (which is no longer in the Bill), the overall response was supportive of the proposed reforms.
On 30 July 2013, the Inheritance and Trustees’ Powers Bill [HL] was introduced in the House of Lords under the House of Lords procedure for Law Commission Bills. The Bill was amended in Special Public Bill Committee and on Report.
The Bill is based largely on the Law Commission’s draft Bill and would introduce a number of reforms including:
• amending the entitlement of the surviving spouse or civil partner under the intestacy rules;
• providing for the statutory legacy (which the surviving spouse inherits before the deceased’s estate is shared with children or other descendants) to be updated regularly;
• updating the definition of “personal chattels”;
• amending other technical rules relating to intestacy and family provision claims;
• amending the management powers of all trustees under sections 31 and 32 of the Trustee Act 1925 (powers to distribute income or capital from a trust fund to or for the benefit of beneficiaries who are not yet entitled to take such funds outright).