Inheritance and Trustees’ Powers Bill [Lords]

David Nuttall Excerpts

Wednesday 26th March 2014 Commons Chamber

[The Minister of State, Ministry of Justice (Simon Hughes)]

I beg to move, That the Bill be now read the Third time.

I am happy to be able to inform the House that the consensus that clearly prevailed in the last debate on the previous piece of proposed legislation will, I believe, prevail here. I am very happy to bring for the first time on to the Floor of the House a Bill which is small, perfectly formed, but very important and which will affect a very large number of people.

The Bill reforms certain aspects of the law of inheritance and the law relating to trustees’ statutory powers. The purpose and effect of the Bill will be to modernise and simplify this area of the law to create a fairer and more comprehensible set of rules and to make the process of administering an estate faster and easier for people at what will always be a difficult time.

The Bill gives effect to most of the recommendations made in the Law Commission’s report “Intestacy and Family Provision Claims on Death”. It will modernise and simplify not just the law of intestacy to make it fairer, but the process of administering an estate to make it faster and easier for all concerned. The Bill also makes some important technical improvements to the family provision legislation and to the statutory powers of trustees, to make sure that they, too, are clearer, more consistent and easier to apply.

A considerable amount of consultation was undertaken on the Bill—as the Law Commission would do—so it came to Parliament built on a broad consensus of support, and having been through the Lords, it now comes to the Commons. That support is very welcome. I wish to refer to the Bill’s two core proposals, briefly address the four bits of the background “scenery” to it and deal with some of the details. Slightly unusually, I am doing so on Third Reading, because as the hon. Member for Barnsley Central (Dan Jarvis), who leads for the Opposition, and others will know, the Bill has come through a procedure which has been used only a few times in Parliament. When we deal with proposals from the Law Commission which are regarded as matters not likely to cause great controversy in the House, we have a procedure that predominantly takes place upstairs, so we have not looked at these matters in the Chamber of the House of Commons before.

The two significant proposals are that in future surviving spouses will be the sole beneficiary of an estate where somebody dies leaving no will and there are no children. Not only do we believe that is right, but the Law Commission’s research showed that a majority of people in the country favoured giving priority to a surviving spouse in those circumstances. The Bill therefore reflects public expectations by making the surviving spouse the sole beneficiary in such circumstances.

The other key issue is what happens when a person who dies intestate has surviving children. The Bill seeks to simplify the sharing of assets on intestacy in a way that is fair to those who have been closest to the deceased—so first comes the surviving spouse or civil partner, and next come any children or their children. We think that the Bill ensures that all those people will be adequately provided for in future. Removing the current requirement that there be life interest trusts will reduce costs and make the law easier to understand and apply.

Of course, we would probably never be able to pass a law that everyone in the country thought right or fair, but we hope we are legislating for the occasions when people do not leave a will in a way that most reflects what we believe they would have intended, given that we have no written evidence of what their wish would be. We hope we are reflecting the real life expectations of what somebody would want for their partner and children.

That leads me to the four short background points about why the Bill is important. Obviously, making a will is and remains the best way to make provision for loved ones and others after we have gone, but the figures are surprising. In 2011, just under 50% of the registered deaths in England and Wales were those that might be classified as intestate: where there was no written provision. First, therefore, it is important to say to people that making a will is really important. Many people do not do it and we hope that this debate and the consideration given to the Bill will remind people of the benefit of making a will.

Making or updating a will is not a complicated process. Some 480,000 people died in England and Wales in 2011, with 220,000 of those deaths leading to the personal representatives obtaining a grant of probate in respect of a valid will and 40,000 leading to letters of administration being granted. We do not know for sure whether that means that the remaining 220,000 did write anything, or even thought about writing anything. None the less that was the figure. Nearly a quarter of a million people died without any evidence of written arrangements. Therefore, with the support of colleagues and the hon. Member for Barnsley Central, with whom I am meeting formally to discuss how best to proceed, we want to add to the work already done in the voluntary and legal sectors to encourage people to make their wills.

The Government provide information on a number of websites, including gov.uk and the probate services website, to help people who are considering making a will. Other organisations also provide advice. “Dying Matters” runs an annual awareness campaign about planning for old age and death. This year it is planned for 12 to 18 May, and the theme is, “You only die once”. That was not my title, but it seems a good one.

There is also a free wills month for those over 55. It is running this month, so people need to get on with it because there are not many days left. In November, there is a scheme called Will Aid. I make no apologies for wanting to encourage people to make wills. It is the one way that we can be certain that what is done with people’s assets is what they intended to be done. It is fundamental to the law of England and Wales that the person who writes the will decides what he or she wants to happen to their property after their death, and where the law applies it will give effect to those wishes, subject only to one qualification, which is that, under the Inheritance (Provision for Family and Dependants) Act 1975, there is a safety net for people who should have been provided for in wills but were not.

My second point has become topical in recent days, so I want to make the Government’s position and the legal position clear. There has been some press coverage on whether Islamic law or sharia law trumps English law in relation to these matters. There was certainly a headline and a lead story in one of the Sunday papers last weekend that may have alarmed some people. People in this country are free to leave their property in accordance with their preferences and beliefs. The Law Society issued to its members a practice note on sharia law succession—it was the subject of the article in the Sunday press—which indicated that there has been a demand from some solicitors and their clients for information on how to plan ahead for death in a way that complies with English law. Far from promoting sharia law as an alternative jurisdiction within our country, the Law Society is clear that it is promoting English law and English legal services. Let me say this clearly. To suggest, as one newspaper did, that the guidance means that,

“Islamic law is to be effectively enshrined in the British legal system for the first time”

is both wrong and misleading.

If people wish to arrange their last will and testament in accordance with the principles underpinning Islamic law or any other faith or belief tradition, then of course they are entitled to do that, provided they comply with the law of England and Wales. They can write down how they want to dispose of their assets according to their faith view, but it is within English law, in a will that then gets implemented and is subject to rules that allow people who should have been included but have been left out to apply.

[Mr David Nuttall (Bury North) (Con)]

I declare my interest as a non-practising solicitor and as someone who has drawn up thousands of wills in the past. Does the Minister agree that there has been no change in the law? It has always been possible for solicitors to draw up wills in accordance with their instructions under English law. If they want, they can draw them up under laws of other countries, as long as they make it clear that they will be applicable in that other country, but not under English law. In so far as wills that are meant to be controlled by English law are concerned, there has been no change whatever in the law.

[Simon Hughes]

The hon. Gentleman is absolutely correct. He knows from his practice outside the House and from his time in this place that that is exactly the position. The law has not changed. The guidance does not change the law, it has not been changed elsewhere and it is not about to be changed. The Government have no plans to change it. We are simply reinforcing the clear view, implied by his question, that if somebody goes to their solicitor and says that they would like their will to be drafted in a way that reflects their beliefs about how they want to dispose of their assets, they can do so, subject to the overarching rule of English law. That often applies to the Jewish tradition, and might be the same for some Christians and people of other faiths. The law has not been changed and I want to knock on the head the assertion that the Law Society was somehow facilitating a change. The Law Society was simply ensuring that when it had had enquiries from its members about how to proceed they were given guidance, but that does not change the law one jot.

A third general point, which is important, is that people are living longer—and thank God for that. We are very lucky to have in this country a great, and growing, life expectancy. The Office for National Statistics tells us that nearly 14.5 million people in the UK are over 60, but with old age comes an increasing incidence of dementia and Alzheimer’s. According to Alzheimer’s UK, 800,000 people in this country have dementia. The Government are keen that it should be known that there is a legal facility open to people to make what is called a lasting power of attorney—an LPA—that gives an individual the opportunity to plan ahead for the time when they might lack the capacity to deal with their own affairs. We are talking not about after death, but about when people are still alive but might not have the physical or mental capacity to deal with their own affairs.

People can appoint somebody of their choice to make decisions on their behalf about their property and financial affairs or health and welfare. They can do that online through a facility introduced last year by the Office of the Public Guardian. The process is relatively simple: people are guided and prompted through each page so that the form is completed correctly. It can be printed off for signature and the LPA can then be applied for, and the fee is currently £110. It is registered as a document recognised in law.

There are 51 million adults in England and Wales, but the number of people who have made such an arrangement is small, and I hope the Bill will also remind people that one way of dealing with their affairs, for not just after they have left this earth but before, is to make provision now. The lasting power of attorney is the way to do that.