Draft Inheritance and Trustees’ Powers Bill

Draft Inheritance and Trustees’ Powers Bill: Introduction

Consultation on the draft Inheritance and Trustees’ Powers Bill. This Bill gives effect to the recommendations in parts 2–7 of the Law Commission’s report, Intestacy and family provision claims on death.

The consultation is aimed at those with an interest in succession law, probate and private international law, in particular practitioners, professional groups and academics, in England and Wales.

Background

In 2008, the Law Commission began work on a project considering two areas of the law of inheritance and certain aspects of trustees’ powers:

  • Intestacy: When a person dies “intestate”, that is without leaving a valid will disposing of the whole of his or her property, the distribution of any money and other assets (the deceased’s “estate”) among surviving family members is governed by a set of legal rules known as the intestacy rules.
  • Family provision: Whether or not the deceased left a will, certain family members and dependants may apply to court for reasonable financial provision from the estate, under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”). This is often referred to as a claim for family provision.

These are both important areas of the law, affecting a large number of families at times of financial and emotional vulnerability.

Studies suggest that around 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 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.

The intestacy rules date back to 1925 and have not been comprehensively reviewed for more than 20 years (when the Law Commission last considered this area of the law). The 1975 Act has not been the subject of a full review since it was enacted.

In October 2009, the Commission published a consultation paper2 reviewing the current law, discussing options for reform and putting forward questions for consultees, including provisional proposals for reform.

In May 2011, a supplementary consultation paper followed that set out broader options for reform of statutory provisions which enable trustees to distribute income or capital from the trust fund to or for the benefit of beneficiaries who are not yet entitled to take such funds outright.

Almost 150 consultation responses were received, from members of the public, lawyers and other professionals and organisations – including law firms, charities and professional bodies. The project also benefitted from significant new research.

This included focus group research commissioned for the project, a large-scale survey of public attitudes to will-making and intestacy, funded by the Nuffield Foundation, and analysis by HM Revenue & Customs of the value of testate and intestate estates.

The resulting report, Inheritance and family provision claims on death,3 was published on 14 December 2011. It sets out and explains recommendations for reform of the law and presents two draft Bills to implement the necessary changes, the first of which is the Inheritance and Trustees Powers’ Bill that is the subject of this consultation.