Inheritance changes for couples

By Paul Lewis
Presenter, Radio 4's Money Box

Loved ones do not automatically inherit your estate

People in couples would inherit more when their partner dies without leaving a will under plans published this week.

Even people who are married or in civil partnerships do not always inherit all their late partner's property.

It is divided under complex rules which give a share to children, parents or siblings and give unmarried partners nothing at all.

The Law Commission wants to change the law in England and Wales for married and unmarried couples.

If someone dies without a will and without children, the surviving spouse should take the whole estate Elizabeth Cooke, Law Commission for England and Wales

Speaking on Radio 4's Money Box programme, Professor Elizabeth Cooke from the Law Commission said many people did not understand what happened after a death where there was no will - the so-called "intestacy rules".

"People think that everything goes automatically to their spouse," she said.

"That's not the case. The intestacy rules are complicated and depend on whether there are other close relatives surviving.

Complex rules

EXISTING INTESTACY LAW A surviving spouse does not always inherit the whole of their partner's possessions Couples who are not married or in civil partnerships have no rights to their partner's property in England and Wales

"If you die with children the surviving spouse takes everything unless the estate exceeds £250,000 in which case a complex sharing mechanism kicks in," she added.

"Our statistics show 90% of estates fall below that £250,000 limit."

If the couple have no children then the surviving spouse (the Law Commission uses that term to include civil partners as well as husbands and wives) keeps the first £450,000 and half the rest with the other half divided among surviving parents or, if there are none, surviving brothers or sisters.

Prof Cooke said the Law Commission would scrap that rule.

"We are proposing that if someone dies without a will and without children, the surviving spouse should take the whole estate even where there are surviving parents or siblings.

Many people feel that if they live together for many years... that the cohabitant is in the same position as a spouse. That is not the case Elizabeth Cooke, Law Commission for England and Wales

"Where there are children we ask whether the surviving spouse should take everything or whether there should be a sharing mechanism and if so could we simplify things and do more to ensure the surviving spouse can stay in the family home."

Cohabitants get 'nothing'

The Law Commission's most radical proposals would give couples who are not married or civil partners the same rights as those who are. Again, Prof Cooke said there was a lot of misunderstanding about the current law.

"Many people feel that if they live together for many years, perhaps they have children together, that the cohabitant is in the same position as a spouse and will be provided for by intestacy rules," she said.

"That is not the case. The intestacy rules give nothing to cohabitants and they often have to apply to the court for provision particularly if they are left looking after the couple's young children."

She wants that changed.

"Where cohabitants have children together or have been together for at least five years we propose they should be treated in the same way as a surviving spouse.

The proposals are out for consultation until 28 February 2010.

The law in Scotland and Northern Ireland is different and there are no current plans for change in either jurisdiction.

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BBC Radio 4's Money Box is broadcast on Saturdays at 12 noon, and repeated on Sundays at 2100 GMT. Download the podcast.