Respecting our elders - Are parents being left out in Inheritance Act claims?

13 November 2013

Let’s face it — lawyers, judges and legislators don’t have the best reputation for keeping up with society and being, as the kids used to say about 50 years ago, "with it”.

But gosh darn it, they keep trying. A good example of this is the law around financial provision after death. Over the last 20 or so years, changes have been incrementally made to the intestacy rules and Inheritance (Provision for Family and Dependants) Act 1975 (I(PFD)A 1975) to try and keep abreast of social reality. 

The provision for spouses (and now civil partners), has increased; unmarried partners have been able to make a I(PFD)A 1975 claim since 1996; and claims by adult children are being increasingly entertained by the courts.

This area of law is receiving another timely makeover under the Inheritance and Trustees’ Powers Bill, which is currently making its way through Parliament. The laudable purpose of the Bill is to make the law work for as many different types of family as possible. This recognises the wonderful truth that the modern family unit comes in all shape and sizes — it is no longer just “man and wife and 2.4 children”. The Bill proposes, among many things, more straightforward and realistic provision between spouses and civil partners. It also deals with adoption, surrogacy and people raising children alone.

Significant unfairness

However, even once the Bill is passed, there will still be potential for significant unfairness in some circumstances. In particular, parents who outlive their children may continue to find themselves with inadequate provision and no right to make any claim. Unlike spouses and children, “parents” do not have standing to make a claim as of right under I(PFD)A 1975.

These very sad situations are quite often seen in practice in Court of Protection cases where a child has received a substantial award following medical negligence at birth.

If the child (P) dies before he is 18 then, under the intestacy rules, his estate will be divided equally between his parents. The new Bill will not change this. More often than not, this will be the “right” result because it will reflect what the child “would have wanted” and reflects what society as a whole would probably say is fair. 

But sometimes this will not be the “right” result at all. If one parent has never been around and has played no part in P’s life it seems grossly unfair that that parent is entitled to half of the estate. In cerebral palsy cases, it is not unusual for medical negligence awards to be worth millions of pounds. Therefore, an absent parent might find himself with a million pound windfall made up of money that, ultimately, came from the taxpayer.

Softening the blow

The blow may be softened if the other parent makes a claim under I(PFD)A 1975 on the basis that they were being “maintained” by P. In Re B (deceased) [2000] Ch 662, [2000] 1 All ER 665, the Court of Appeal held that a mother did have standing to make a claim on the basis that she received a monthly  allowance from her daughter’s settlement while she was caring for her.

Senior Judge Denzil Lush, head of the Court of Protection, describes these situations as “mutual dependency” and they are very common in practice. When a child has received a large settlement, they will very often own the family home, make a large contribution to the family’s outgoing and even make “gratuitous payments” to parents and other family members in respect of care provided to them. In these cases, any potential unfairness arising under the intestacy rules could perhaps be tempered by a I(PFD)A 1975 claim. However, strictly speaking the court should only be looking at what is actually required for maintenance, not what is “morally” correct.

If P is not “maintaining” his parent then no claim under I(PFD)A 1975 is possible. It might be that P is in foster care but still has a relationship with one parent but not the other. Or it might be that although P has received a large award it is not being used to maintain the family. In either of these two cases, the intestacy rules will apply and this will be the end of the story — not matter how unjust the result.

Making a will

Once P is 18, he can make a will or, if he lacks mental capacity, an application can be made to the Court of Protection to make a “statutory will” for him. This is a will, approved by the court, that is supposed to be as close as possible to the will P would have made if he had capacity. The official solicitor (OS) will represent P and will be able to consider if there is perhaps one parent who is less deserving of P’s bounty than the other. Rightly or wrongly, it seems that in practice it is harder to cut someone out of a will when the testator lacks capacity. The OS often places great importance on P being remembered for “doing the right thing” and they will often not support a will which excludes a parent who has played no part in P’s life without joining them as a party. This may involve spending large sums of P’s money on tracing agents and is very likely to cause a great deal of stress to the other parent. In contrast, someone who has testamentary capacity can cut a close relative out of their will for something as trivial breaking a teacup if they choose.

Widespread unfairness

Unfairness to parents is not necessarily confined to Court of Protection cases. As the population ages, it will become more and more common for adult children to provide for their elderly parents. Where a parent outlives a child who hasn’t made a will, a I(PFD)A 1975 claim is currently not possible, unless there was an actual relationship of “maintenance”. If this is not the case, for example if there was an “understanding” that the parent’s care home fees would be paid in the future, then there may be no redress.

Ultimately, as so many student essays have concluded, the law has to strike a balance between flexibility and certainty. The law needs to be flexible enough to adapt to our diverse and changing society. Is the answer to have a “catch all” category in I(PFD)A 1975 allowing a claim where there was a “moral  entitlement”? Probably not — every single estate in the country would be vulnerable to challenge. However, making “parents” one of the categories of claimant might be a happy medium.

First published in New Law Journal, 18 October 2013

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