Family Law

Eighth edition

by Kate Standley

Updates for Chapter 4: Family property

May 2014 update

4.13 The Inheritance (Provision for Family and Dependents) Act 1975

4.13 (f) Reform of the Law

The Inheritance and Trustees' Powers Act 2014

The Inheritance and Trustees' Powers Bill received the Royal Assent on 14 May 2014. The Act will make substantial changes to the Inheritance (Provision for Family and Dependants) Act 1975, and to the law of intestacy and trustees’ powers. It includes reforms that will:
  • ensure that where a couple are married or in a civil partnership, assets pass on intestacy to the surviving spouse in all cases where there are no children or other descendants;
  • simplify the sharing of assets on intestacy where the deceased was survived by a spouse and children or other descendants;
  • protect children who suffer the death of a parent from the risk of losing an inheritance from that parent in the event that they are adopted after the death;
  • amend the legal rules which currently disadvantage unmarried fathers when a child dies intestate;
  • remove arbitrary obstacles to family provision claims by dependants of the deceased and anyone treated by the deceased as a child of his or her family outside the context of a marriage or civil partnership;
  • permit a claim for family provision in certain circumstances where the deceased died ‘domiciled’ outside of England and Wales but left property and family members or dependants here; and
  • reform trustees’ statutory powers to use income and capital for the benefit of trust beneficiaries (subject to any express provisions in the trust instrument).
The government intends to bring the Act into force on 1 October 2014.

January 2014 update

Resulting trusts, financial relief on divorce, and company assets

The case of Prest v. Petrodel [2013] UKSC 24 raised interesting issues about the interface between financial relief on divorce and company law. In this case, the Supreme Court had to decide whether assets belonging to private companies owned by the husband could be taken into account by the family court when making a lump sum order in favour of the other party under Part II of the Matrimonial Causes Act 1973. The Supreme Court held that the disputed properties vested in the relevant companies were held on a resulting trust for the husband, and therefore fell within the terms of section 24 of the Matrimonial Causes Act 1973 as ‘property to which the spouse is entitled, either in possession or reversion’.
(For more on the case, see Chapter 7.)

4.12 The devolution of property on death

4.12(c) Cohabitants on intestacy: reform

In March 2013 the Government announced that it would not be giving effect during this Parliament to the Law Commission’s recommendations set out in Part 8 of the Law Commission’s Report on Intestacy and Family Provision Claims on Death, Law Com No 331, December 2011, which would have been given effect by the draft Inheritance (Cohabitants) Bill annexed to the Report. The Bill would have given certain unmarried partners who had lived together for five years the right to inherit on each other’s death under the intestacy rules. Where the couple had a child together, the entitlement would have accrued after two years’ cohabitation, provided the child was living with the couple when the deceased died.

4.13 Inheritance (Provision for Family and Dependants) Act 1975

4.13 (f) Reform of the Law

A Bill to reform legal measures for people who die without a will

In March 2013 the Law Commission announced (see www.lawcomission.justice.gov.uk) that on 21 March 2013 the Government had accepted, in part, its recommendations set out in its Report on Intestacy and Family Provision Claims on Death, Law Com No 331, December 2011. The Report included a draft Bill, the Inheritance and Trustees’ Powers Bill, which was published for consultation by the Ministry of Justice between 21 March and 3 May 2013 (see below).

The Inheritance and Trustees' Powers Bill 2013-14 was introduced into the House of Lords on 30 July 2013. It Includes reforms that will:
  • ensure that where a couple are married or in a civil partnership, assets pass on intestacy to the surviving spouse in all cases where there are no children or other descendants;
  • simplify the sharing of assets on intestacy where the deceased was survived by a spouse and children or other descendants;
  • protect children who suffer the death of a parent from the risk of losing an inheritance from that parent in the event that they are adopted after the death;
  • amend the legal rules which currently disadvantage unmarried fathers when a child dies intestate;
  • remove arbitrary obstacles to family provision claims by dependants of the deceased and anyone treated by the deceased as a child of his or her family outside the context of a marriage or civil partnership;
  • permit a claim for family provision in certain circumstances where the deceased died ‘domiciled’ outside of England and Wales but left property and family members or dependants here.


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