Ending of Relationships by Death: The Financial Consequences
The Ending of Relationships by Death: The Financial Consequences
All civilised states have rules about how property should be dealt with on death. But at the beginning of the twentieth century English succession law was distinctive: it had accepted1 the principle of absolute2 freedom of testation: a person of full age and capacity could make a will leaving property to whomsoever he chose. It mattered not what (if any) legal relationship existed between the testator and beneficiary: a man could leave property equally to his wife or his mistress, and to his child whether legitimate or illegitimate. Conversely, neither a wife, a child, nor anyone else had any legal cause for complaint if a testator made no provision for him or her. Of course, many people fail to make wills,3 and the law also has to provide rules to determine who is to inherit in the event of intestacy. This chapter seeks to outline the development of the law in these two areas.
Two particularly significant trends can be identified. First, the rules of intestate succession were modified over the years so as to favour the claims of a surviving spouse as against other members of the family. The law was also strongly influenced by the increase in the owner occupation of houses, and increasingly adopted the principle that a surviving spouse should on intestacy inherit the deceased’s interest in the matrimonial home.
The second trend in the development of English succession law was the (initially reluctant) acceptance that in some cases dependants of the deceased should have a right to ask for more. In 1938 the Inheritance (Family Provision) Act restricted a testator’s right to disinherit dependants; and the law (rather than giving a wife or other members of the family a right to inherit a certain proportion of the deceased’s property) gave the court a discretion to override the terms of the will so as to make reasonable financial provision for surviving (p.479)dependants. Over the years, the court’s powers were extended, the category of ‘dependant’ eligible to make a claim for provision under this legislation broadened, and the significance of marriage in determining eligibility reduced.
INTESTACY: THE COMMON LAW RULES
At the beginning of the twentieth century, the distribution of property not disposed of by a valid will4 depended on whether it was classified as real or personal. Succession to real property (notably freehold land) was governed by the common law rules of descent5 which identified the heir to whom the property passed automatically on the death. The outstanding feature of these complex rules was that the deceased’s children and other issue6 were preferred to other relatives, with male issue being preferred to females and the elder male7 being preferred to the younger.8
The heir took the property subject to the rights of the deceased’s surviving spouse: a widower was (subject to a number of conditions)9 entitled to a life estate ‘by the Curtesy of England’ in the whole of his wife’s realty while a widow was in theory10 entitled to dower (ie a life interest in one-third of her husband’s realty).
Intestate succession to personal property (which included leases as well as money and chattels) was governed by the Statute of Distributions 167011 the scheme of which was that a widower took the whole of his wife’s personalty to the exclusion of other relatives, whilst a widow took one-third of the deceased’s personal property absolutely, the balance going to the deceased’s legitimate (p.480) children and issue. If there were no issue, the widow’s share was increased to one half, and the balance went to the next of kin.12
Providing for homeless widows
The effect of the common law rules would often be to deprive the widow of a clerk or workman of the family home; and in 1890 the Intestates’ Estates Act provided that a widow (but not a widower) should be entitled to a legacy13 of £500 (perhaps £30,000 in year 2000 values) if her husband left neither will nor issue. The 1890 Act marked a significant change in policy:14 for the first time English law gave a widow preference over her husband’s kin; and the Act created a precedent by giving the widow a right to a legacy sufficient to ensure that she would be able to inherit a modest family home.
The fact that real and personal property were governed by different legal regimes caused many complications; and it was the policy of what is usually described as ‘the 1925 property legislation’ to assimilate15 the two. For this purpose, it was essential to have a uniform set of rules to govern the devolution of all forms of property on death: the content of the rules did not matter; what was important was that the same rules should apply to all the property which passed as part of a deceased person’s estate. This may explain how it came about that what, in retrospect, can be clearly seen as a decisive change in the policy of the law was carried through with very little discussion or consideration.16
The 1925 legislation provided that the intestate’s spouse should (save in the case of the largest estates) be preferred to other relatives; and the principle that spouse and children should share even the smallest estate was finally abandoned. Under the new regime the surviving spouse (husband and wife were put on an equal footing) was entitled to the personal chattels17 absolutely, to a statutory legacy18 of £1,000, and to a life interest in any residue.19 The reason for fixing (p.481) the statutory legacy at £1,00020 was because wills of small estates almost invariably gave the surviving spouse the whole estate and the £1,000 legacy would produce the same result in the great majority of intestacies.21 Even with somewhat larger estates a £1,000 legacy would usually enable the deceased’s house to be retained for occupation by the survivor.22
Policy of 1925 legislation defeated by inflation
The 1925 legislation thus gave clear expression to the related policies of allowing the whole of all but the largest estates to pass to the surviving spouse and of ensuring that the widow should be able to go on living in the family home after her husband’s death. But the technique of quantifying the surviving spouse’s entitlement as a fixed money sum meant that, in a period of inflation and rising property prices, those objectives were no longer attained. In the course of World War II, the value of money fell by a third or more; and in 1948 (according to official indices) £1,700 would be needed to buy goods which would have cost £1,000 when the amount of the statutory legacy was fixed in 1925. Eventually, a Parliamentary Question23 led the Lord Chancellor24 to appoint a Committee under Lord Morton of Henryton25 to consider the rights of a surviving spouse in the residuary estate of an intestate and report whether change in the law was desirable.26
(p.482) THE MORTON REPORT ON THE LAW OF INTESTATE SUCCESSION 1951
The Morton Committee worked with astonishing speed. It had no doubts about its ability to interpret what it described27 as the spirit of the age; and the Committee accepted the philosophy (previously adopted in framing the 1925 legislation) that the provision in fact made in wills provided a sound basis upon which the rules of intestate distribution could be based.28 To this end, the Committee drew on a survey of wills probated over a five-week period;29 and it also received advice30 on the law of intestacy in foreign countries and considered a large number of written suggestions (including a petition signed by 3,202 persons urging improvement in the widow’s position).
The Committee did not even consider carrying out an attitude or other public opinion survey; but in spite of (or perhaps because of this) the Committee rapidly agreed on its policy. It accepted that there had been a considerable depreciation in the value of sterling since the 1925 reforms, that the matrimonial home was often worth a sum ‘greatly in excess’ of the statutory legacy, and that, in consequence, the home would often have to be sold to satisfy the claims of a deceased intestate’s children. In contrast, the average testator’s will would make better provision for the surviving spouse; and the Committee concluded that the surviving spouse’s entitlement on intestacy should be increased. But deciding on the nature and scale of the increase was less easy.
The Committee drew a distinction between cases where the intestate left surviving issue and other cases. Where there were surviving issue, the Committee recommended a five-fold increase (to £5,000—substantially more than the increase to £2,000 which would have sufficed to take account of general inflation since 1925) in the amount of the statutory legacy payable to a surviving spouse.31 In cases in which the deceased left no issue, the Committee recommended a compromise between those32 who favoured giving the whole estate to the survivor;33 and those who thought that the deceased’s kin should also benefit. (p.483) Where the deceased died without issue but left a spouse and a parent or sibling of the whole blood the spouse should take a legacy of £20,000 and half the residue absolutely.
The balance of the estate should go to the surviving parent or parents, or (if neither parent survived) to the brothers and sisters of the whole blood.34 The Committee did not think the average individual would want relatives more remote than this to benefit from the estate at the expense of the surviving spouse35 and accordingly recommended that brothers and sisters of the half blood and their issue, grandparents, uncles and aunts of the whole or half blood and their issue, should lose the right36 to share in the estate of an intestate who died leaving a surviving spouse.37
The general tenor of the Committee’s proposals was thus vividly to exemplify what has been described38 as the amputation of the blood stock and the increased significance of claims based on marriage (as against claims based on genetic kinship).39 But the Committee was well aware that making the increased provision proposed for the surviving spouse might well work injustice in many cases where there were step-children by a previous marriage; and after considerable debate the Committee decided to recommend that the Inheritance (Family Provision) Act should be made to apply to cases of intestacy.40 In effect, the Committee accepted that the complexity of modern family structures required recourse to a judicial discretion to do what would be fair in all the circumstances.
(p.484) The Intestates’ Estates Act 1952
The Government accepted the Morton Committee’s recommendations,41 and the Intestates’ Estates Act 195242gave effect to them.43 Notwithstanding the lack of parliamentary interest44—the Bill received almost no critical probing of legislative policy or detail—the Intestates’ Estates Act 1952 is of major significance in the development of the law. Not only did it emphatically recognise the primacy to be accorded to the claims of a surviving spouse and (for the first time in English statute law) recognise the family home as an asset deserving special protection; it also accepted the principle that, since no general code for intestate distribution could achieve satisfactory results in every case, the court should be given power to vary the statutory provisions in cases in which those provisions failed to make reasonable provision for the deceased’s dependants. However, as we shall see, the class of person qualifying as ‘dependants’ was defined rather narrowly.
(p.485) JUDICIAL DISCRETION TO ORDER REASONABLE PROVISION FOR DEPENDANTS45
A person of sound mind, memory and understanding could make a will disinheriting his wife and children; and the disappointed relatives would have no legal redress. But the qualification that the testator be of sound mind is important. If the will were truly eccentric (as in one case where a man left his wife no more than the sum of five pounds and his pet parrot)46 the disinherited relatives47 might have a case for attacking the deceased’s sanity, and it was said by lawyers48 that very often compromises satisfactory to all concerned were negotiated without the publicity of a contested law suit. But it could be difficult and expensive to attack the validity of a will in this way and it was not sufficient to show that the testator was ‘moved by capricious, frivolous, mean or even bad motives’.49 A testator who hates all human beings50 but satisfies the ‘sound mind and understanding’ test of testamentary capacity was entitled to leave the whole of his property to charities benefiting animals; whilst a testator could ‘disinherit… his children, and leave his property to strangers to gratify his spite, or to charities to gratify his pride’.51
The National Union of Societies for Equal Citizenship campaign
In the 1920s the National Union of Societies for Equal Citizenship (hereafter ‘NUSEC’) (which had adopted the principle52 that husband and wife should each have the right to an equal share of the couple’s income) began to campaign for reform. The fact that a husband’s obligation to maintain his wife did not (p.486) extend to an obligation to provide for his widow and children was a particular source of complaint. NUSEC’s formidable President (Eleanor Rathbone)53 and Parliamentary Secretary (Mrs Eva Hubback)54 began a campaign to influence politicians and civil servants. Mrs Hubback did not seek any ‘rash change in our law of testamentary freedom’ but wanted something done to protect lower middle class widows left entirely without provision.55Lord Astor seems to have acted as NUSEC’s spokesman; and the Lord Chancellor’s Permanent Secretary, Sir Claud Schuster, evidently arranged for to him to consult Sir Benjamin Cherry56 whose memorandum on the subject was (Schuster told Cherry) of great help, making Astor appreciate the difficulties:
‘information and advice coming from you has a double advantage that it is obviously disinterested while he may suspect me of merely trying to make things easy for the government’.
Astor duly moved a resolution in the House of Lords57 asking that a Select Committee be set up to consider ‘whether a change is necessary in the laws governing testamentary provision for wives, husbands and children based on the experience of Scotland, Australia and the other portions of the Empire’. He had previously agreed with Schuster what he would say; and also that he would not press the motion to a division; and no one can have been surprised that the proposal was opposed by the Government and others. NUSEC claimed the opposition was on ‘various and mutually destructive grounds’; but they had got what they wanted. Astor’s speech had created ‘an extraordinary amount of interest’ amongst the general public, and press comment had been ‘almost wholly favourable’. The publicity prompted revelations from those who had suffered from the law and been advised that they had no remedy; and NUSEC was able to produce a pamphlet, ‘Unjust Wills’ highlighting specific instances of hardship.
The imminence of the first General Election in which women were eligible for the vote on the same terms as men58 gave politicians an especial interest in topics likely to gain (or lose) women’s votes; and on 19 April 1929 Prime Minister Baldwin (accompanied by the Chancellor of the Exchequer, Winston Churchill) received a delegation organised by NUSEC and the Equal Rights General Election Campaign Committee. Baldwin did not give a specific response on the inheritance issue, but the leaders of the other two major political parties were less(p.487) hesitant.59 Lloyd George60 claimed to have seen cases in his career as a solicitor in which the ‘monstrous’ law had deprived61 women of any share in the business which their own intelligence and skill had built up. For his part, Ramsay MacDonald62 claimed the law frequently had poor women ‘bundled out into the streets’ after their husband’s death, and agreed that something had to be done.
The defeat of the Conservatives in the 1929 General Election63 no doubt encouraged Mrs Hubback, Miss Rathbone and others to think that there was now64 a realistic prospect of getting a Bill through Parliament; and certainly the incoming Lord Chancellor65 was sympathetic to reform.66
The search for an acceptable solution
It soon became apparent that there were very different notions as to how the problem should be tackled. On the one hand there were those who, for ideological67 or (p.488) practical68 reasons, thought that the widow should have a legal entitlement to a definite share of the deceased’s property. On the other hand, an impressive body of legal opinion (powerfully represented by Sir Benjamin Cherry)69 considered that any restriction on the right of disposition by will would not only be unworkable70 but was ‘unsuitable to the genius of the people’.71But even Cherry agreed that a Bill ‘somewhat on the lines of the New Zealand’72 and Australian statutes73allowing the court to order maintenance for spouses and children left destitute would be workable and ‘would probably be welcomed by all political parties’.74
Faced with this conflict, the reformers tried to find an acceptable compromise. The first Bill, introduced by Astor in 192875 gave the widow and children a right to apply to the court if (but only if) the will76 did not give them a certain proportion (p.489) of the estate.77 The reformers argued that the Bill would establish a benchmark for reasonable provision.78 Testators would know that if they made a ‘capricious or unreasonable’ will the personal representatives would inevitably do a deal or ‘in the last resort’ the court would rectify the offending document’79 and would accordingly ensure their wills contained proper provision.80
Other people tried their hands at drafting Bills, all with different emphases. The breakthrough came in 193181when Eleanor Rathbone managed82 to get a Bill83 referred to a Joint Select Committee.84 The Committee85took a great deal of evidence,86 but this revealed little support for radical reform.87 In particular, (p.490)several solicitor witnesses88 were sceptical89 about whether there really was a problem.90 But the Committee came down in favour of reform: it accepted that there were cases in which widows or widowers and children, unable to support themselves, had been unjustifiably left unprovided for; and the Committee was not prepared to ‘say that, absolutely, their number is negligible’.91
So the Committee accepted that there was a problem. But it unequivocally rejected the Rathbone Bill—‘complicated and would undoubtedly lead to greater expenses’—as a remedy.92 Rather, a surviving spouse or child left without adequate support should be allowed to apply to the court for maintenance of an amount ‘measured by the amount of the estate and the circumstances in which the family had been living’. The Committee considered that ‘a Measure on these lines would be worthy of serious consideration by Parliament’.93 Mrs (p.491) Hubback and her colleagues had won an important victory. The end was not yet in sight, but perhaps they could celebrate the end of the beginning.94
It was to be seven more years before the Inheritance (Family Provision) Act received the Royal Assent in 1938. It is true that at the 1931 election the Labour representation in Parliament (and thus the number of those with strong commitment to the policies advocated by NUSEC) was dramatically reduced95 and it was not until 1933 that another Bill96 was introduced by a Conservative. But the issue was never one of party politics,97 and on the occasions when the House of Commons divided on family provision Bills there were never more than 30 votes against. Why then did it take so long for legislation to reach the statute book?
The answer lies in the existence of differences of opinion within the Government machine.98 In particular, Lord Chancellor Hailsham99 was (p.492) strongly100 opposed to legislation; whilst the least equivocal supporter was the comparatively junior Law Officer Sir Donald Somervell KC.101 Each made his position clear;102 but eventually even Hailsham103 had to admit104 that whilst he remained strongly opposed to any legislation there would be ‘a good deal of sentimental support’ for it in both Houses of Parliament and ‘that the Government could hardly oppose’ it. The Whips reported that nearly all the opposition in Parliament had disappeared and that there was likely to be ‘something like unanimous support’ for the Bill which had been introduced.
(p.493) 1937: the Government accepts the inevitable
In 1937 the Cabinet105 accepted Prime Minister Neville Chamberlain’s advice to assume an attitude of neutrality to the Bill, pointing out fully and frankly the difficulties which would arise. Eventually a deal was done: the promoters of the Bill made concessions,106 and the Government agreed to make the assistance of Parliamentary Counsel available107 and to give the Bill a safe passage.
There was some opposition to the Bill as it passed through its various parliamentary stages.108 This ranged from the argument of principle denying the legislature any right to interfere with free disposition of property save in truly exceptional circumstances,109 through the criticism that the lack of any guidance about the scale of provision to be expected of a reasonable testator would make the courts’ task impossible110 particularly since the testator would not be (p.494) there to explain why he had acted as he did,111 to the more practical considerations of how a small farm or other business could be divided up amongst the testator’s family without destroying it.112 But the promoters and the Government113 did their best to meet points of any substance.
THE INHERITANCE (FAMILY PROVISION) ACT 1938
The Act114 which eventually received Royal Assent gave the High Court115 power to order ‘reasonable provision for the maintenance’ of applicants who fell within certain specified classes of ‘dependant’—the testator’s surviving spouse, an unmarried or disabled daughter, or a son under 21 or disabled.116 The Act did not accept the principle that relatives should in principle be entitled to provision out of the deceased’s estate;117and it was certainly not intended (p.495) that the court should seek to impose a fair or equitable redistribution of the testator’s capital. It was a fundamental principle that provision be restricted to maintenance (and save in the case of very small estates118 provision was to be made exclusively by ordering periodical payments). These periodical payments were to determine on the ending of the dependency—for example, on the widow’s remarriage—or earlier if the court so ordered.‘119 Moreover, there was a cap on the proportion of the testator’s estate which could be allocated to those qualifying as ‘dependants’: they were not to get more than the income from two-thirds of the estate (leaving a third for the testator to dispose of as he wished).120 The Act also accepted that testators might reasonably leave it to the widow or widower to decide what would be proper provision for their children; and no application by a child could succeed if the will left two-thirds of the estate’s income to the deceased’s surviving spouse.121
In an attempt to meet concerns that farms and other small businesses would have to be sold, the Act provided that the court should have regard to the nature of the testator’s property and that it should not order any provision which would require an improvident122 realisation of assets. There was also concern about the impact of the legislation on the routine administration of estates. How could executors safely distribute property if they were faced with the possibility that a subsequent successful application for provision would be made? The answer was found in a time bar:123 the application had to be made within six months of the grant of probate (and prudent executors would not distribute during that time).
The Act also tried to meet concern that the court might not know the reasons which had influenced the testator in deciding on the terms of his will. The court was to be required to ‘have regard’ to the testator’s reasons so far as ascertainable; and the Act expressly permitted the court to accept such evidence as it considered sufficient for that purpose.124 Another provision evidently intended to (p.496) prevent the undeserving125 from benefiting directed the court to have regard, not only to the dependant’s and testator’s financial position but also to the ‘conduct of that dependant in relation to the testator and otherwise, and to any other matter or thing which in the circumstances of the case the court may consider relevant or material.’126
The impact of the Inheritance (Family Provision) Act 1938
The Act gave the court powers which it had never had before; but, for that reason, the powers were strictly limited.127 Mrs Hubback was characteristically up-beat about the likely impact of the legislation;128 but Eleanor Rathbone forcefully expressed her regret129 that it did not give the family any entitlements; and that the Act had put the interests of property ‘above and beyond the interests of flesh and blood’. Nevertheless, modest as the Bill was there would (she said) be many widows and orphans who would have occasion to call its promoter blessed.
Fears voiced by the opponents of reform that it would precipitate a ‘flood’ of cases in the courts proved unfounded. In part, this may be because the judges gave very little encouragement to disappointed relatives. The general approach was one of great caution: it was precisely because the Act constituted an invasion (albeit only a limited invasion)130 of the right of testamentary disposition that judges held the powers conferred by the Act should be ‘exercised only with great circumspection and to a limited extent’.131 For many years132applicants (p.497) had to show that the deceased had been ‘unreasonable’133 in not making more substantial provision, and judges reiterated that the Act was confined to making provision for the maintenance of dependants rather than providing legacies to relatives who might be thought to deserve recognition.134 It is true that maintenance was not necessarily confined to mere subsistence: ‘maintenance’ extended beyond food to clothes, housing and spending money; and the wife of a wealthy man135 was not to be restricted to ‘just enough to put a little jam on her bread and butter’.136 But where the deceased had only small means (and many of the reported cases involved tiny estates)137 the court might well dismiss a claim on the basis that the funds available were simply not sufficient to make any realistic contribution to the applicant’s maintenance so that it could not be said that the testator’s failure to make provision for his wife was unreasonable.138 And there was always the risk that the court would order an unmeritorious applicant to pay the costs139 (which, in many small money cases, would otherwise absorb most if not all of the estate).
Reported cases are only a small proportion of those which come before the courts; and no doubt there are many cases in which claims (possibly even claims which deserve to be categorised as ‘blackmailing’) are settled out of court; but it (p.498) appears that upwards of 2,000 applications were made between 1939 and 1951.140 There was some criticism141 of aspects of the legislation;142 but generally the utility of the Act in preventing injustice was accepted, if only gradually. By 1950 the Lord Chancellor’s Department recorded the view that the Act had ‘certainly served a useful purpose’.143
Investigation of further reform: the Lord Chancellor’s Department driven to action
This did not mean that the Act was perfect. On the contrary it had well-recognised technical defects, and the restrictions which in 1938 had been prudently accepted as the price of getting the Bill onto the statute book often seemed unnecessarily to deny justice to dependants. But the tensions aroused within the Lord Chancellor’s department by the events leading up to the 1938 Act (and particularly Lord Chancellor Hailsham’s bitter opposition to the legislation which the Law Officers favoured)144 had left scars: suggestions that enquiries be made about the desirability of extending the principles underlying the 1938 Act were politely rejected.145
It was not so easy to deny the need for action about the effect of inflation on the surviving spouse’s £1,500 ‘statutory legacy’ on intestacy; and (as already noted) a committee on the law of intestate succession, chaired by Lord Morton of Henryton,146 was appointed in 1950. The Lord Chancellor’s officials at first tried to exclude anyconsideration of the 1938 Act from that committee’s terms of reference;147 but it was soon pointed out that to increase the size of the widow’s entitlement would greatly increase the risk of doing injustice to other dependants (and especially to the deceased’s children by an earlier marriage or (p.499) to his step-children). As the Senior Chancery Judge148 put it, ‘the more the widow is to take, the more need there is to protect the children’. The Lord Chancellor’s Department had to give way: the Morton Committee’s terms of reference were amended (as narrowly as possible in the circumstances) to include consideration of ‘whether, and if so to what extent and in what manner the provisions of the [1938 Act] ought to be made applicable to intestacies’.149
The Morton Committee goes too far
The Morton Committee had no problem in making recommendations about those technical matters which the Lord Chancellor’s officials had been willing for them to consider. Should the 1938 Act apply to partial intestacies (where the will dealt only with the deceased’s house, for example)?150 The Committee had no difficulty in deciding that legislation should put it beyond doubt that the court was to look at the estate of a deceased testator as a whole, and not be ‘arbitrarily limited to such part thereof as he may have chanced to dispose of by will’. After all, as the Committee put it,151 the ‘needs of a dependant remain just the same whether the testator’s estate devolves under his Will or under his intestacy, or partly under both’. But once that had been conceded, how could the extension of the Act to cases of total intestacy be resisted? It made no sense for the court’s powers to depend on whether the testator left a duly executed will irrespective of whether it made any effective disposition of his estate; and if the 1938 Act were to be applied to a 99% intestacy, why should it not apply equally to a 100% intestacy?
It is true that some commentators felt it would be invidious for the Court to declare provisions made by Parliament in a statute to be ‘unreasonable’; but the Committee considered this argument rested on a
‘confusion between what is reasonable as a general provision of the law suitable to meet the average case, and what is reasonable in the special circumstances of an exceptional case. This may be illustrated by an example. It might be reasonable for Parliament to provide as a matter of general law that a surviving spouse should take the first £5,000 of the estate of an intestate. But it would not be reasonable that a woman dying possessed of an estate of £5,000 and leaving two infant children by her first marriage wholly without means and a wealthy husband by a second marriage should leave all her estate to her husband. If in such a case she died intestate we venture to think that there would be no (p.500)embarrassment in a Court declaring that the deceased had failed to make reasonable provision for her infant children and rectifying the matter accordingly’.152
It followed that the provisions of the 1938 Act should be extended to cases of total intestacy; and the Committee had no hesitation in so recommending. To do so was clearly within the Committee’s terms of reference. But what about the effect of increasing the surviving spouse’s entitlement on others who might have had some sort of claim to be supported by the deceased? The majority of the Committee refused to negotiate for an extension of their terms of reference153 to enable them to consider this aspect of the matter. But, by way of compensation, the minority were allowed to have written into the Report—‘at the risk of travelling outside out terms of reference’154—some forceful criticism155 of the fact that the terms of the 1938 Act prevented the courts from making provision for maintenance where the estate was small.156 (The Report claimed that the courts were ‘quite unable’ to provide maintenance in ‘at least half the cases’ which came before them157). Even more daringly, the Report included a statement that the extension of the 1938 Act to intestacies would ‘obviously’ make it ‘necessary for the whole of the Act to be closely reviewed’.158
The Government accepted the Committee’s recommendation to allow applications where the deceased had died intestate and the Intestates’ Estates Act 1952 duly provided that the court should not be bound to assume that the law relating to intestacy made reasonable provision in all cases.159 The Government also agreed to remedy the worst technical defects identified by Morton in the 1938 Act.160 But it shrank161 from tackling the fundamental issue of how to provide (p.501) a remedy for the injustice sometimes caused by giving the widow an overriding preference162 on intestacy. No comprehensive review of the Act took place for a further 20 years; but piecemeal amendments to the law made in 1958 and 1966 in response to particular pressures were effective in suggesting the need for a much bolder approach to reform.
PIECEMEAL REFORM PREPARES GROUND FOR RADICAL REFORM
(i) Provision for the divorced wife out of the husband’s estate
In all the discussion about potential injustice no one had mentioned the case of the divorced wife. But the rise in the number of divorces, coupled with the fact that the Divorce Court had extremely limited powers to order capital provision on divorce, began to cause problems on a significant scale. Orders for periodical payments163came to an end on the husband’s death; and as Lord Merriman, the President of the Divorce Division,164 put it165 in characteristically vivid language:
The Morton Committee had remarked on the injustice such an increase in the amount going to the widow could do to the children of an intestate’s first marriage, but often in these cases the widow would care for them and make provision for them. ‘But what about the marriage which has been dissolved? Take the case of the husband who has broken up the marriage and has married the woman named in the petition, and by that fact has become intestate. He then dies. She cannot be relied upon to have any particular tenderness for the children of the first marriage. The petitioning wife, unless there is a secured provision for her for her life, which is extremely unlikely in the range of figures we are considering, automatically loses her maintenance on the death of the husband, and with it, pro tanto, the power to support her children, who are cut out of the intestate’s estate in favour of the woman who has broken up their home. The reverse case of the co-respondent taking the statutory legacy at the expense of the children would be no less shocking.’
The fact that the Government had set up a Royal Commission on Marriage and Divorce166 (also chaired by Lord Morton) in 1951 was happy coincidence; (p.502) since the position of the divorced spouse was clearly within their terms of reference. The Commission was impressed by the hardship likely to be caused to divorced wives wholly dependent on unsecured periodical payments and left destitute on the husband’s death; and recommended that the deceased’s estate be made liable for the support of the divorced wife in such circumstances and that the court should be guided by the same general principles as under the 1938 Act ‘in so far as such principles are appropriate’.167
This recommendation no doubt seemed technical and uncontroversial. It attracted little attention; and the Committee of Officials set up to consider implementation of the Royal Commission’s recommendations regarded legislation as acceptable.168 A Bill was prepared169 to give effect to this and other apparently uncontentious recommendations of the Royal Commission; and, in the time honoured way, the Bill was handed to a back bencher who had a good position in the ballot for Private Members’ Bills. But the very fact that the Bill was passing through the House of Commons without debate or even a statement of its content170 prompted suspicion on the part of some MPs. A storm blew up. The Government was attacked for accepting the ‘novel provision’ that a guilty wife should be able to get her hands on her husband’s assets after his death, and was accused of bringing forward a charter for adulterous wives. It took a considerable amount of emollient explanation from respected back benchers in the Commons171 and from the President of the Divorce Division in(p.503) the House of Lords172 to get the Bill safely on the statute book as the Matrimonial Causes (Property and Maintenance) Act 1958.
The 1958 Act did not take the simple course of adding divorced spouses to the statutory list of qualifying ‘dependants’. Instead, it created a parallel regime, administered in the Divorce Court and in some respects different173 from that created in 1938. But in practice the court found little difficulty in deciding the small number of applications174 made under the Act. The first reported case175 demonstrates both the mischief at which the 1958 Act was primarily aimed176 and also the fact that there would often be no dispute about the amount to be awarded:
Mr and Mrs Askew were divorced in 1944, and Mr Askew was ordered to make periodical maintenance payments to the wife of £377 per annum. He remarried in 1945 and died in 1959 leaving his estate of some £28,000 to his second wife for life with remainder to nephews and nieces. The first wife had no assets and (the maintenance payments having ceased) depended on National Assistance. The parties agreed that provision of £286 per annum177 should be made for her out of the estate, and the only dispute was as to the date from which the payments should start.
In retrospect the 1958 Act can be seen as a significant landmark in the gradual extension of the courts’ powers to reallocate family assets in the wake of divorce; and in the acceptance of the view that the courts could reasonably be entrusted with wide discretionary powers to readjust family finances.
(p.504) (ii) The Family Provision Act 1966 opens the floodgates?
Irritating technical defects in the 1938 Act kept on appearing. First, in 1966 the Court of Appeal decided that the Act did not permit the making of orders giving a dependant a proportion (such as a half or a quarter) of the estate’s income.178 Unfortunately, many such orders had been made. Secondly, the rule prohibiting the making of applications more than six months after the grant of probate continued179 to cause well documented hardship.180 Thirdly, the rule confining the court’s powers (save in the case of very small estates)181 to periodical payments of income caused real inconvenience and disproportionate expense in administering small trusts. Finally, the fact that, however small the estate, applications had to be made to the High Court seemed increasingly difficult to justify. As Ungoed-Thomas J judiciously put it in March 1966, to restrict the jurisdiction in this way
‘was obviously a sensible arrangement when this novel and difficult jurisdiction was introduced; but it may well be that this arrangement has outlasted this particular justification for it’.
The judge’s tactfully expressed hope that the rule might ‘perhaps now be considered’ was timely. The Law Commission (established in 1965) had, with the perhaps naive enthusiasm of the pioneer, set up an ‘immediate remedial department’;182 and this department had already begun to consider some of the (p.505) problems to which judicial decisions regularly drew attention.183 This sufficed to allow Lord Chancellor Gardiner to introduce a Bill (which the Lord Chancellor and the Law Officers described as a technical and boring response to a number of judicial requests for minor improvement on points of detail)184 without going through the traditional process of seeking advice from a committee of experts. The Bill prompted very little185parliamentary discussion,186 and received the Royal Assent as the Family Provision Act in November 1966.
The Family Provision Act 1966 empowered the court to award lump sums, however large (or small) the estate.187 The county court was to have jurisdiction in cases where the estate was £5,000 or less.188 The bar preventing applications being made where two-thirds of the income had been given to the surviving spouse189and the troublesome restrictions on the maximum amount of periodical payments were swept away;190 and the court was given a general power to allow applications to be made notwithstanding that six months or more had(p.506) gone by since probate.191 Finally, the court was given power to make interim payments to an applicant in immediate need of financial assistance192 thus remedying a defect pointed out by Lord Denning193in the Second Reading debate.
Perhaps these changes could fairly be described as intrinsically narrow and technical, but the effect of the 1966 Act was to destroy all the careful restrictions which had been imposed in 1938. As one author194 has pointed out, the 1966 Act ‘represented a substantial extension of the jurisdiction and was an endorsement by Parliament of the principle of varying testamentary disposition by judicial discretion’.195 In this way, the Act prepared the ground for the much more radical reforms carried through in 1975. In the meantime, the courts began to take advantage of the greater freedom given them by the 1966 Act (by, for example, directing that the whole of the estate should simply be transferred to the deceased’s husband’s widow).196 The cautious (perhaps even suspicious) approach previously taken to the legislation seemed increasingly difficult to justify.
Discretion triumphant? The Inheritance (Provision for Family and Dependants) Act 1975
The Matrimonial Proceedings and Property Act 1970 had extended the discretionary powers of the Divorce Court in financial matters, but this extension was intended to be without prejudice to the introduction of community of property and fixed rights of inheritance (for which there was a great deal of support). The question whether a system of legal rights of inheritance (under which a surviving spouse would be entitled as of right to a fixed proportion of the estate of a (p.507) deceased spouse whether he died testate or intestate and regardless of the terms of the will)197 should be introduced into English law was central to the debate. In 1971 the Law Commission published a Working Paper198 which examined the ‘fixed share’ question, and the case for giving the court wide discretionary powers to ‘rewrite the will’ if this were necessary to ensure the surviving spouse a fair share of the family assets (rather than simply enough to provide for her maintenance).199
INHERITANCE RIGHTS: THE CASE FOR FIXED SHARES
Many legal systems (including the Scottish legal system)200 give a wife a right to a fixed share (one-third if there are surviving children)201 of her husband’s movable property on his death. Another common method of ensuring that the deceased’s family inherit a stipulated portion of a deceased’s estate (used in many of the United States for example)202 is to give surviving relatives the right to set aside the deceased’s will if it does not give a fixed proportion of his assets to the wife or other claimant.
The 1971 Law Commission Working Paper considered the introduction of a system under which a surviving spouse would be entitled as of right to a fixed proportion of the deceased’s estate (perhaps one-third). The Commission identified advantages in a system of legal rights of this kind, not least that there would be a fixed standard capable of application without resort to the court.203 But as the Commission pointed out, legal rights could not take account of the circumstances of each case; and if a fixed rights regime were simply added to the discretionary system created in 1938, ‘the advantage of certainty, which legal rights would otherwise secure, would be diminished’. Moreover, some dependants would do worse than they would have done under a discretionary regime, and a fixed rights regime would at best be an imprecise way of protecting the survivor’s interest in family assets.204 The Law Commission’s consultation on these proposals revealed a ‘marked lack of support among members of the legal profession (practising and academic) for the principle of legal rights of inheritance for a surviving spouse’, whilst the Commission reported that ‘the (p.508) preponderance of opinion among women’s organisations and members of the public’ was also opposed to the introduction of such a system.205 In 1973, the Commission concluded206 that ‘a strengthened family provision law, with its greater flexibility’ would be a better means of securing the survivor’s interests than a system of legal rights. The addition of a system of fixed legal rights of inheritance to the system of family provision law would lead to uncertainty and confusion. Any advantage derived from the automatic operation of legal rights of inheritance would be offset by the disadvantage of rigidity and possible incompatibility with the new standards proposed for the Family Provision legislation.207
Since 1973 no official or professional body has suggested that a fixed-rights system be introduced into English law. In this way, the 50-year struggle for the introduction of definite entitlement to a husband’s property came to an end, apparently with the agreement of the women’s organisations which had at one time been such committed advocates of reform.
IMPROVING THE FAMILY PROVISION LEGISLATION
How, then, should the principles of a system of family provision be ‘strengthened’? There were three obvious grounds for criticism of the existing law. First, the class of dependants who alone could apply for reasonable provision out of the deceased’s estate was narrowly restricted. Secondly, the Inheritance (Family Provision) Act was concerned solely with making reasonable provision for the applicant’s maintenance, and it seemed anomalous that since 1973 a wife whose marriage was ended by divorce could expect the Divorce Court to award her a larger share of the ‘family assets’208 than a wife whose marriage was ended by death could expect under the Inheritance (Family Provision) Act. Thirdly it was a comparatively easy matter for the well-informed209 to evade the operation of the Act.210
The Law Commission made the following recommendations.
(i) Eligibility to apply. The class of ‘dependant’ eligible to make an application under the Act should be widened.211 A child who had been treated by the (p.509) deceased as a child of the family in relation to any marriage to which the deceased was a party should be entitled to apply212 (so that step-children who have lived in the deceased’s home would usually be within the class). All restrictions of age in applications by children and children of the family should be abolished.213 Finally (and most radically) the definition of ‘dependant’should be extended to include any person wholly or partly maintained by the deceased immediately prior to his death.214 This would allow not only an elderly parent supported by the deceased to apply for provision but also a so-called de facto spouse.