Head 5: Legal Rights

Question 1

What are legal rights?

Answer 1

Legal rights are indefeasible [cannot be defeated by testament] rights that are available to certain persons in both testate and intestate succession with regard to moveable property [ONLY!!! NB company shares are moveable.] that arise at common law. They protect against disinheritance.

So if Norma has a husband and three children and she leaves everything to charity, charity will not take everything. it will take everything that remains after the legal rights of her husband and children have been satisfied. Had Norma been single and childless, the charity would have received everything.

Question 2

Who has legal rights?

Answer 2

The relict (gender neutral term meaning widow or widower) and children (also called “issue”) (if any) have indefeasible common law rights, based on value of moveables., called legal rights Protection against disinheritance. Both testate and intestate succession?

Civil partners have the same rights as spouses and relict covers them too.

Question 3

Who is a relict?

Answer 3

this is a technical term for the surviving spouse of the deceased. It is gender neutral so a widow or widower can be a relict. However the right that the relict has has a different name depending on whether it is a widow or widower:
⁃ Relict’s right: gender neutral
⁃ Widow: jus relictae
⁃ Widower: jus reliciti

⁃ In relation to surviving civil partners, they have exactly the same rights (under CPA 2004 s 131) as a surviving spouse and the term ‘relict’s right’ can be used.

Question 4

Who is Issue?

Answer 4

⁃ This is a technical term for the children of the deceased. The issue can be by blood or adopted.
⁃ The right is called “legitim”. Sometimes the term “legitim fund” is used - this is because there can be more than one child and therefore the property available for ‘legitim’ is a fund for division between children.

Question 5

How are legal rights calculated?

Answer 5

Legal rights are calculated by reference to moveable estate. [So these are payments of money - it is not the case that parts of the moveable estate are actually divided into pieces.] The amount people will be entitled to depends on who has survived the deceased.

Question 6

How is the relict’s right calculated?

Answer 6

Relict’s right (Jus relictae for widow or jus relicti for widower)

⁃ If there are issue, the relict is entitled to 1/3 of the moveable estate
⁃ If there are no issue, the relict is entitled to 1/2 of the moveable estate

Question 7

How is the legitim fund calculated?

Answer 7

Legitim[ Also called the bairn’s part] (fund[ This means that whatever the fund comprises will be split between the number of children equally]) (legitima portio), also called bairns’ part. Legitim “fund”.
⁃ If there is a relict, the legitum fund will be 1/3 of moveable estate
⁃ If there is no relict, the legitum fund will be 1/2 of the moveable estate

Question 8

Donald dies, estranged from wife (Eva) and two children (Fiona and Gordon). Testament leaves everything to lover (Harry). Estate: house worth £200,000; sundry moveables worth £150,000. Who gets what?

Answer 8

Eva will get £50,000 and Fiona and Gordon will get £25,000 each. Harry then takes the rest. Donald’s first wife has no claim as divorce dissolves marriage. Also it is irrelevant if the children were not Donald’s children - calculation is the same whether or not Eva is mother to Fiona and Gordon.

Question 9

The same, except that Eva predeceased. Who gets what?

Answer 9

Neither she nor her estate would take anything, of rat dead cannot inherit. The legitim fund would have been half the value of the movable state, and so Flora and Gordon would receive £37,500 each. Harry oddly take the rest. Legal rights are calculated on the state of affairs at the moment of death.

Question 10

Maud dies without issue leaving everything to her brother

Answer 10

Bruno. Her estate is a house worth £200,000 and contents worth £100,000. Her estranged husband Humbert claims legal rights. What does he take? Does he take (i) items in the house to the value of his claim? (ii) Or a pro indiviso share of all the contents? (iii) Or money based on the value of the contents? Cameron’s Trs v Maclean 1917 SC 416.

Question 11

What was settled in the case of Cameron’s Trustees v Maclean 1917?

Answer 11

Legal rights give money based on the value of the content

Question 12

What does this mean: “The relict and bairns are heirs among creditors and creditors among heirs”

Answer 12

1. This means the legal rights are calculated on the basis of the net estate (i.e. only what remains of the deceased’s estate after debts)
2. They take priority over many succession claims on the net estate (but not all now)

Question 13

Can immovable property be used to pay legal rights?

Answer 13

Immovable property can be used to pay legal rights. Where residue must abate before special legacies. It is what is left over after all the claims on the estate have been made. So where the legitim is £40,000 the immovable may need to be sold to pay this.

Question 14

What is the dead’s part?

Answer 14

this is the portion of the moveable estate that the deceased can leave by his will even if legal rights are claimed. (The net estate minus the legal rights claims, if any).
⁃ NB this only affects the moveable estate - this means the heritable estate is effectively part of the ‘dead’s part’ too.

Question 15

What is renunciation?

Answer 15

Legal rights may be renounced by persons entitled to receive them – no one is forced to claim legal rights.

Question 16

Why would anyone renounce legal rights?

Answer 16

⁃ Altruism - Family solidarity: Feel inappropriate to defy wishes of deceased, or compete with other family (nice reasons).
⁃ Might be more lucrative to renounce legal rights to claim a legacy (mercenary reasons)
- The rule about approbate and reprobate — the rule that some cannot take both legal rights and a legacy.

Question 17

What is the effect of renunciation?

Answer 17

⁃ It doesn’t increase the shares of others who are entitled to legal rights – so if relict renounces legitim still remains 1/3 etc.
⁃ Example: Donald dies estranged from wife (Eva) and two children (Fiona and Gordon). Testament leaves everything to his lover (Harry). He leaves £200k heritable and £150k moveables. Under legal rights Eva is entitled to 1/3 of the movable estate and the legitim fund is worth 1/3 (for Fiona and Gordon). However if Eva renounces her legal rights then the legitim fund remains unchanged, so Fiona and Gordon will still receive half of the 1/3 legitim fund.

However if you renounce your legal rights before the person dies then this will affect the calculation – this is exceptionally unlikely!!

⁃ Example: Same as above but before Donald dies Eva renounces her legal rights. In this case the legitim fund would be ½ of the moveable estate. There is no change in the benefit.

It is also competent to renounce legal rights before death. This seldom happens but if it does the rule is different. In this case the renunciation does benefit those who do claim legal rights as the overall pot is larger.

Question 18

What are the rules of priority in testate and intestate succession?

Answer 18

1. Testate Succession
   
   1. Debts (including taxes)
   2. Legal Rights
   3. Legacies
2. Intestate Succession
   
   1. Debts
   2. Prior rights
   3. Relict’s rights
   4. Cohabitant’s right
   5. Legitim
   6. Free estate

Question 19

What is approbate and reprobate?

Answer 19

Under s 13 of the Succession (S) Act 1964: you cannot claim both a legacy and legal rights. You must choose one or the other (no exceptions). So if the legacy is taken they must renounce their legitim. This is called approbate and reprobate. To accept the legacy is to approbate the testament, and to accept the legal rights instead is to reprobate the testament.

Question 20

Stewart v Bruce’s Trs (1898)

Answer 20

the executors must give the person entitled to a legacy or legal rights time to determine/decide which they would rather obtain. (Assume in examinations that people will decide to maximise what they take).

Question 21

Naismith v Boyes (1899)

Answer 21

the question arose as to whether, if you had partial intestacy (when some of the estate is governed by the will and some of it is not governed by the will – so if there is no residue clause) could legal rights be claimed in relation to the intestate estate, and receive the legacy? The court held that you can claim legal right in relation to the intestate portion of the estate
- If X accepts a legacy and if the estate is partially intestate, the doctrine of approbate and reprobate does not bar X from claiming legal rights in relation to the intestate estate. Naismith does not clarify the issue how much

Question 22

Anton and Betty are married. They have one child, Constantia. By a separate relationship he has a son, Darius. Anton dies. He bequeaths everything to Betty. His net moveable estate is £120,000. Betty renounces relict’s right. Constantia renounces legitim. Darius claims legitim. How much does he take?

Answer 22

?

Question 23

Sarah’s testament gives trust liferent to daughter Tara and fee to daughter Ursula. Tara claims legitim. What happens to liferent? (a) If fee vested, fiar’s possession accelerated. (b) If fee unvested, then “shadow liferent” used to make “equitable compensation”.

Answer 23

?

Question 24

Jane dies leaving heritage worth £100,000 and moveables worth £300,000. No relict. One son, Knut. Testament leaves house to Knut and residue to Jane’s lover, Larry. Knut claims legit.
How is the estate divided?

Answer 24

Knut claims legitim so he must renounce the legacy of the house. Larry takes the whole estate minus £150,000 (1/2 of the moveables). 


Question 25

Ziggy dies. No relict. Two daughters, Alice and Beth. Heritage worth £10,000, moveables worth £300,000. Testament leaves heritage to Alice and Beth equally and £100,000 to Alice. Residue to Ziggy’s brother Charles. How is the estate divided?

Answer 25

Beth claims legitim and thus renounces the legacy. Alice claims legacy and thus renounces legitim. The legitim fund is £150,000. Beth takes half of this, £75,000. Alice takes half of the heritage plus £100,000. Charles takes the rest. 


Question 26

What is representation?

Answer 26

This allows the children of someone who has predeceased their own parent to claim what their parent would have been entitled to.
⁃ In other words a child (A) has parent (B) and grandparent (C). B dies. A would not ordinarily be able to claim from his grandfather’s estate (unless he had been left a legacy). However under the doctrine of representation, A could take the place B. A is said to represent their parent. This also applies in intestate succession.

Question 27

When is representation available?

Answer 27

1. For legitim – this is provided for under Succession (S) Act 1964 s 11
2. For intestate succession rights – this is provided for under Succession (S) Act 1964 s 5.
   ⁃ Representation does not apply to the co-habitants right, the relicts right or prior rights.
   ⁃ It also doesn’t apply to legacies (NB there is a similar mechanism which does apply in relation to legacies known as the conditio …around 14 mins in add name

Question 28

How is legitim calculated if there is representation?

Answer 28

⁃ The division can either be per stirpes or per capita.
⁃ If the claimants are not all the same relation to the deceased then the division is per stirpes. If the claimants are all of the same relation (equal propinquity) to the deceased then the division is per capita.
⁃ Per capita = divided evenly
⁃ Per stirpes =

Per stirpes example:
⁃ Alice has two children, Brenda and Charles. Brenda has two children (David and Ellen) and Charles has one child (Fraser). If Brenda dies on the 1 March. Alice dies on the 3 March leaving a £60k legitim fund. Under normal rules, Brenda cannot inherit from Alice (and thus David and Ellen can’t inherit from Alice via Brenda either). However, under representation, this allows David and Ellen to represent Brenda and inherit from Alice. This would involve a per stirpes relation. This is because Charles (Alice’s child) is still alive, and will inherit from Alice. David/Ellen are Alice’s grandchildren. The £60k legitim fund would have been divided £30k to Brenda and £30k to Charles. Since Brenda has died, David and Ellen split what Brenda was entitled to 50/50. This means that David and Ellen will receive £15k each and Charles will receive £30k.

Per capita example:
⁃ Alice has two children, Brenda and Charles. Brenda has two children (David and Ellen) and Charles has one child (Fraser). Charles and Brenda die on the 1 March (so both Alice’s children have predeceased). Alice dies on the 3 March. David and Ellen can represent Brenda, and Fraser can represent Charles. David, Ellen and Charles are all of the same relation to the deceased the division is per capita – the £60k is divided equally between them so they all receive £20k.

Question 29

What is representation not possible for?

Answer 29

(i) legacies
(ii) prior rights,
(iii) relict’s right
(iv) cohabitant’s claim. 


For legacies, something similar to representation sometimes applies: conditio si institutus sine liberis
decesserit.

Question 30

What is Collation (Collatio inter liberos)?

Answer 30

If someone received an advance of money from the deceased before death, then this might be considered to be a collatable advance – this might be considered to be like an advance payment of legitim.
⁃ E.g. one of three children is given £50k before the death of the deceased. The law may consider this to be akin to an advance payment of legitim (a collatable advance).

Question 31

What happens to their succession pot if there has been a collectable advance?

Answer 31

If there has been a collatable advance then the person who received the collatable advance must notionally add this advance to the legitim fund for the purposes of calculating legitim entitlements. NB if there is only one legitim claimant then there is no collation.

Question 32

Does the person who opts not the claim legitim have to collate?

Answer 32

No - So if a child receives £60,000 and the legitim claim is £20,000 then he would be free to refuse legitim and would not collate. The other siblings would each take a third of the legit because if someone rejects legal rights, that does not benefit other legal rights claimants. The child will receive nothing from the estate but will keep the £60,000.

**Also note that if there is only one legitim claimant, there is no collation.

Question 33

Jack has a relict and 3 children (Tom, Dick and Harry). He has heritable property worth £300k and £180k moveable property .Tom has received £12,000 in advance, this is a collatable advance.

Answer 33

The legitim fund is one third of the movable estate: 180/3 = £60k. Tom must notionally add this 12k to the legitim fund to make the legitim fund £72k. £72k split between the three children is £24k each. Therefore, Dick and Harry would receive £24k from the fund and Tom would receive £12k from the fund and can keep his collatable advance (to make his total up to £24k.)

Question 34

Jack has a relict and 3 children (Tom, Dick and Harry). He has heritable property worth £300k and £180k moveable property. The legitim fund is one third of the movable estate: 180/3 = £60k. Tom has received a collatable advance of £60k.

Answer 34

Tom should notionally add this to the legitim fund, making a total of £120k legitim fund. This would mean that Dick and Harry both are due £40k. But does this mean that Tom has to pay back the £20k to make sure that everyone receives £40k overall? NO. In this situation, Tom would refuse to claim his legitim and therefore he doesn’t need to collate. The legitim fund would therefore remain at £60k. And if someone renounces their legitim (like Tom has) this does not affect the calculation for others. So Dick and Harry will receive £20k each – the value they would normally have got from the fund. The final third of the fund would fall into intestacy

Question 35

Mary’s estate is £120k all moveable. There is no relict. Mary has two children (Nigel and Olivia). Mary leaves a will bequeathing £20k to Nigel, £60,000 to Olivia and the residue to charity. Nigel receives a collatable advance of £12k.

Answer 35

It is not in Olivia’s interest to claim legitim since the legitim fund would be £72k (£60k + £12k collatable advance) and she would thus only receive £36k – she would be better off claiming the legacy which = £60k. Nigel will be keen to claim legitim since he’s only been left £20k in the will. Does Nigel still have to collate his advance? If he had had to collate then he would only receive £24k but if he didn’t he’d receive £30k. The rule is that he does not have to collate (Coat’s Trustees v Coats 1914) (so if there is only one person claiming legitim you do not have to collate any advance).

Question 36

What are circumventing legal rights?

Answer 36

Legal rights cannot be defeated but they may be dodged by forward planning:

Question 37

How may legal succession rights be dodged?

Answer 37

1. Getting rid of assets completely - transfer them into a trust, with the trustees holding for her in life rent and for Una in fee. Or she could sell investments and use the money to buy an annuity.
2. Reducing moveable estate
3. Maximise her hireable estate - buy property which is not subject to legal rights (but she should be careful to make sure the flat is not bought with a company as company can only own movable property).
4. Artificial intestacy
5. This is where there is a testament and someone refuses to take it – this is not the deceased dodging legal rights, it is the claimants of legal rights being scuppered by a surviving spouse (this will be covered in intestate succession)

Question 38

English Law on Inheritance:

Answer 38

Provision for Family and Dependants) Act 1975* ss 1 and 2

“I am speaking as one - I think the only one here - who has actually administered the 1938 Act [forerunner of 1975 Act], and who sat in court to decide cases under it. It really is a very difficult jurisdiction.
In the first place, it has the disadvantage that it places a premium upon those who can go to good legal advisers, prepare a good legal case and make a good presentation before the court. It certainly encourages disputes between families. It is also a very difficult jurisdiction for the judge to exercise. We are given in Clause 3 of this Bill a whole list of considerations which are meant to guide the judge. But I can assure your Lordships that when one is sitting there and trying to make up one’s mind what is fair and right for a particular man, of whose life history one knows little, what is fair and right to do as regards his divorced wife, his widow, a possible mistress, illegitimate children – to decide how to distribute the merits and demerits between these people is painful and exceedingly difficult. I am by no means certain that one is able in many cases to reach the right result. All one can do is to do one’s best and hope that the result is what it should be. But it is not an ideal solution. It is not made ideal by using words such as ‘fair’, ‘reasonable’ ‘just’ and so on. The difficulty of bringing about a good result remains intense”. Lord Wilberforce, quoted in R D Oughton, Tyler’s Family Provision (3d edn; 1997) 29. 
Rather than legal rights the child can ask for a discretionary award. However this encourages family disputes and increases costs.

Question 39

French law on inheritance?

Answer 39

Legitum depends on the number of children and the relict is not protected by legal rights but by the matrimonial property regime.

Question 40

German law on inheritance?

Answer 40

Defined family members (including the relict) are entitled to 50% of what they could have received in an intestacy.