Martin Beard, partner at Dawson Cornwell, and Ray Beard, solicitor at the Head Partnership Solicitors, discuss topical issues concerning succession law and heirship.
Three topical issues concerning succession law and heirship
Three significant ‘stars’ in the matters of succession and heirship seem to have aligned in the legal night sky, connected by a historical drama of families and family inheritance.
- The Supreme Court is deciding on what must be the last of a number of appeals in the case of Ilott v Blue Cross and others  EWCA Civ 797 (known as Ilott v Mitson in earlier hearings), which concerns a claim by the sole heir to a portion of her mother’s estate, which had been left to charity; the claim was brought under the Inheritance (Provision for Family and Dependants) Act 1975 (I(PFDA)A 1975).
- The 800th anniversary of the earliest version of Magna Carta (there were versions in 1215, 1216 and 1217, before the definitive version of 1225), core provisions of which asserted and reinforced the rights of widows and heirs of the body (as they were sometimes known as).
- EU Regulation No 650/2012 (commonly known as Brussels IV which is the term used in this article) sets out new rights which can impact the succession of property and the rights of spouses and heirs, and came fully into effect on 17 August 2015.
Succession rights for spouses and heirs in different jurisdictions
Most jurisdictions, particularly those of continental Europe, provide non-discretionary rights of succession for spouses and heirs. The different rights of heirs in member states to inherit are set out on the EU website. Here is the English version.
To address issues arising from the increased movement of its citizens across member states, the EU sought to simplify the operation of the different succession rules between the jurisdictions of member states. The outcome of this was Brussels IV. It is now in full effect in those member states that have signed up to it. Click here to see the English version.
The English way of handling succession rights of heirs and spouses
It is frequently said in legal circles that the primary rule in English law is the freedom of testamentary disposition. This rule is only overridden in limited circumstances, and particularly in cases brought by an application to the court to decide if and the extent to which the deceased’s estate does not make reasonable financial provision for the applicant. The ability for a spouse (as defined by English law) or heir (or other persons falling within a defined class) to make an application claim is a statutory right, and currently stated in the I(PFDA)A 1975.
The recognised approach to this piece of legislation was succinctly stated by Mr Justice Oliver in Re Coventry (deceased)  2 All ER 408; confirmed by Court of Appeal  3 All ER 815:
‘It is not the purpose of the Act to provide legacies or rewards for meritorious conduct. Subject to the court’s powers under the 1975 Act and to fiscal demands, an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases or, if he chooses to do so, to leave that disposition to be regulated by the laws of intestate succession. In order to enable the court to interfere with and reform those dispositions it must, in my judgment, be shown, not that the deceased acted unreasonably, but that, looked at objectively, his disposition or lack of disposition produces an unreasonable result in that it does not make any or any greater provision for the applicant and that means, in the case of an applicant other than a spouse, for that applicant’s maintenance.
It clearly cannot be enough to say that the circumstances are such that if the deceased had made a particular provision for the applicant, that would not have been an unreasonable thing for him to do and therefore it now ought to be done. The court has no carte blanche to reform the deceased’s dispositions or those which statute makes of his estate to accord with what the court itself might have thought would be sensible if it had been in the deceased’s position.’
The laws of England and Wales still give great prominence to the finality of a valid testamentary document governed by those laws. It is this approach that explains the position taken by Mr Justice Oliver, whose judgment still remains good law and of considerable importance to the general approach to the I(PFDA)A 1975.
The clash between Brussels IV and English law
The approach of English law is not the approach adopted by the rest of Europe or, indeed, in most places in the world. The difference became obvious when the UK government decided not to implement Brussels IV, which now applies to 25 member states.
The general rules of that Regulation are set out in articles 21 and 22 of Brussels IV:
21.1 Unless otherwise provided for in this regulation, the law applicable to the succession as a whole shall be the law of the state in which the deceased had their habitual residence at the time of death.
21.2 Where, by way of exception, it is clear from all the circumstances of the case that, at the time of death, the deceased was manifestly more closely connected with a state other than the state whose law would be applicable under paragraph 1, the law applicable to the succession shall be the law of that other state.
22.1 A person may choose as the law to govern his succession as a whole the law of the state whose nationality he possesses at the time of making the choice or at the time of death.
If these provisions were to apply in the UK, inheritance rights to English assets could be governed by the laws of succession of another country.
The clash between the English law approach to inheritance rights and those that apply in the bulk of other EU countries was further highlighted when parts of the Law Commission’s draft bill (which later became the Inheritance and Trustees’ Powers Act 2014), were rejected by parliament. These proposed changes would have, for the first time, allowed an I(PFDA)A 1975 claim to be brought against the English and Welsh assets of the deceased, even if they had died domiciled outside England and Wales. For example, in the case of a Polish person who dies having been habitually resident in England, while retaining Poland as their domicile of origin, the law remains that there is no entitlement for the surviving spouse / civil partner or child (or others asserting some form of dependency) to pursue in England any claim under the I(PFDA)A 1975 against the deceased’s assets.
There is a discord between:
(a) the prevailing provision for spouses and heirs in most jurisdictions in the world
(b) those jurisdictions that follow English law and allow the rule of testamentary freedom to override the rights of spouses and heirs except in limited circumstances.
Given this discord between the underlying laws in England and Wales and the rules of succession of the other signatory states, it is not surprising that the UK did not become a signatory to Brussels IV.
The historical development of succession rights under English law since Magna Carta
English law’s approach to inheritance rights appears to have become fixed in the 1830s. The Inheritance Act 1833 summarised some succession rights, including cases of intestacy. In 1833, the Dower Act gave a husband the right to extinguish his widow’s dower by deed or will. Dower was an ancient entitlement of the surviving wife to a protected interest in her husband’s estate following his death. Magna Carta states (in translation):
‘A widow after the death of her husband shall forthwith and without difficulty have her marriage portion and inheritance; nor shall she give anything for her dower, or for her marriage portion, or for the inheritance which her husband and she held on the day of the death of that husband; and she may remain in the house of her husband for 40 days after his death, within which time her dower shall be assigned to her’ (later classified as clause 7).
Elsewhere, the importance of protecting the rights of widows and heirs in several of its other provisions is recognised: it sought to address grievances over wardship arrangements for underage heirs; for example, clause 3 states: ‘… let him [the heir] have his inheritance without relief and without fine when he comes of age.’ After King John’s death and the variations during the reign of Henry III in 1297, Magna Carta appeared on the statute roll and for centuries thereafter that version, based on the 1225 charter, formed the recognised statutory basis for its provisions.
However, over time these provisions were, all bar a few, repealed. The courts gradually removed ancient fixed heirship rights for the deceased’s widow and legitimate children (now more commonly known as ‘forced heirship’). This concluded with the Wills Act 1837, which succinctly systemised what is, subject to some later changes to that statute, the legal position today.
If it is thought that a laissez-faire approach was an answer to ancient and out-of-date practices, then it should be noted that at the time, the vast bulk of land in the country was in the ownership of a few landed families and subject to strict settlements or legal structures which curtailed any ability to pass on the land on death. Also, by the 19th century, married women had virtually no rights with regard to possessions: ownership of personal possessions (including leases) passed to their husbands on marriage. With regard to freehold property, women retained ownership, but not the right to the receipt of rent. They did not benefit from any of the voting reforms of the 19th century. It was only in 1870 that the first Married Women’s Property Act began a gradual series of reforms to strengthen their entitlements.
Other Commonwealth countries influenced the thinking behind the I(PFDA)A 1975; they brought in reforms to address the problems arising from the predominance of wills made in those countries, which of course adopted or applied English laws. The first reforming statute was the Inheritance (Family Provision) Act 1938: it followed New Zealand’s approach and gave the probate judge discretion to alter the deceased’s will if ‘reasonable provision’ had not been made for the maintenance of the widow or legitimate children. The Act was not particularly well received. For example, Mr Justice Farwell, after rejecting an application by a widow (Re Joslin, Joslin v Murch  1 All ER 302), whom the deceased husband had left to live with another woman and the two illegitimate children that they had together, stated:
‘The jurisdiction under this Act is one which is extremely difficult for the court to administer. The judge is put in a most unhappy position in cases of this kind. However, it is a discretion, and it is a discretion which the court must exercise judicially …’
He dismissed the widow’s application and also made a costs award against her. This was even though the deceased had made no capital provision for her when they separated and was paying her £1 a week (about £50 at current prices), which ended on his death.
Of course, for the surviving spouse the legal position and general approach of the courts have substantially improved, provided the deceased was domiciled in England and Wales at the time of their death. Baker v Baker  EWHC 977 (Ch) illustrates this: while recognising there is limited authority on what is reasonable financial provision for the spouse of the deceased, guidance in divorce cases is not a starting point or reliable approach. The special position has to be taken into account, so in this case the widow was awarded assets from the estate that amounted to a figure of £750,000 which was more than half its overall value.
The Ilott case
The same cannot be said for heirs. For years, the approach was to require an adult child of the deceased to prove special circumstances or a moral claim. This is no longer the case, but recently reported decisions highlight the difficulties in fairly assessing what should be awarded.
The Ilott case is now before the Supreme Court. At the time of writing, seven of its judges are hearing a further and hopefully final appeal in a case which began its days as Ilott v Mitson  EWCA Civ 346 and  EWCA Civ 797.
The case concerns a claim by the only daughter for provision from her mother’s estate. It has gone through to a number of hearings and appeals, this latest being by the charity beneficiaries. Out of an estate worth £486,000 which was all left to named charities, the Court of Appeal recently awarded £143,000 to the daughter to enable her to purchase her housing association home; the costs of the purchase and up to £20,000 were structured in a way so as not to diminish her state benefits. Previously, the daughter had been awarded £50,000. The charities had appealed against the earlier award made in a lower court, initially succeeding, only to lose before the Court of Appeal; the daughter’s appeal against the amount was heard at a subsequent hearing, where she lost and against which she appealed, only to succeed again in the Court of Appeal. All this for a modestly-sized estate!
We now await the decision of the Supreme Court and the guidance it will give in what heirs can expect to be awarded by a court when they are given no provision or less than they had hoped for under the deceased’s estate.
The resolution of claims
The discretionary nature of the rights of heirs under our legal system can throw heirs into the realm of the courts. The structure of the dispute process, together with the high expense of going to court (legal aid may be available in certain circumstances), the vast bulk of adult children’s claims under the I(PFDA)A 1975 are not pursued or settled well ahead of any hearing.
The advice to such claimants is, by and large, to not expect much: the advice to defendants is to settle on a nuisance factor basis, if only to avoid the costs and delays of a dispute. With pre-action protocols and mediation as a standard preliminary to any court proceedings (with such litigation to be a last resort), many of these issues – often between the widow of a later marriage and the deceased children from an earlier relationship – are thrashed out in confidential negotiations. Mediation at least allows the parties’ sense of injustice and family wrangles to be aired but – hopefully – resolved by some form of compromise; perhaps not a dissimilar process to that which took place at Runnymede.
But while heirs, as that word was understood in 1215, can complain at the lack of a modern ‘charter’ to recognise the extent of their former ancient entitlements, under more recent legislation that term has effectively been widened greatly to include children born outside of a marriage; and for claims on estate under the I(PFDA)A 1975 upon death since 1 October 2014, the term ‘family’ has been extended beyond traditional marriage to allow children to claim as within a family, even if it only consists of one person.
Some factors which seem to be coming more into play at this time:
- the considerable legal costs of claims under the I(PFDA)A 1975
- the increasing number of family breakdowns
- the disappointment of children from earlier relationships
- the difficulty imposed on advisers (some of whom are well out of their depth) in drafting wills to accommodate the conflicts within families.
Some will argue that the English legal system is not adjusting well enough to make allowances for these factors. Despite the current vote by the UK to leave the EU, some will argue it is appropriate to observe other jurisdictions which allow prescribed rights of inheritance to find out if they have something relevant to the English legal system.
Nevertheless, pending the outcome of the much litigated Ilott case, the extent of the rights of such heirs, nearly 80 years after the 1938 act, are still unclear. Hopefully, we will soon know to what extent the Supreme Court will accommodate claims by adult heirs under the legal system of England and Wales – a decision that will become part of the ongoing historical drama concerning families and family inheritance.
Whatever the outcome, it is clear that since ancient times (as witnessed by Magna Carta) the rights of the deceased’s family have played an important part of English law and their entitlements and claims have required constant consideration by both parliament and the courts.