Légitime Reform: where to go? (Part 2)
This is the second instalment of this article
considering the reform of légitime. It will follow the earlier
comparative analysis by arguing that lessons should be learned from other
systems. It is not a matter of choosing between the current English system or
the current Jersey system. Given the lack of any clear, current evidence as to
Jersey public opinion, it is important that legislators bear in mind all
relevant factors and options. A system of allowing those of high net wealth to
opt out of légitime would risk creating a system of total testamentary
freedom which does not appear to exist anywhere else. A cap on claims should be
considered. In particular, it will be argued that, if there is a desire to have
a fixed rule system for protection against disinheritance, then it should be
reformed so as to better meet the objectives. The distinction between movable
and immovable property is difficult to justify in modern Jersey, where the bulk
of the value in most estates will be in land.
1 This is the second part of the article
on légitime, the first
having been published in the June 2018 issue of this Review.
2 In the first part, we set out the
nature of légitime as a
system for giving protection against disinheritance, and the areas of
contention that exist around all such systems. It was explained that systems
generally divide into two categories—
(a) fixed-rule systems;
In the former, there are
clear entitlements for certain relatives to inherit certain proportions of the
assets, and in the latter the court has discretion to make awards in favour of
particular classes of relatives and dependents.
3 The question of which of these two
approaches to take is not simply a matter of preferring putative moral
obligations to relatives and dependants over testamentary freedom, but as to how
to strike a balance between the two. How far a society favours one goal over
the other should not be seen as an attempt to reach an objective moral truth,
as the issues involved are often matters of local culture, with citizens
inclined to believe in the wisdom of the system of their home country. Nor is
it a matter of one approach being modern and the other not. The analysis of the
approaches in other jurisdictions showed that the two types of system vary
immensely as to issues such as (a) which relatives may apply for relief; (b)
whether relief is restricted to dependents; (c) the effect of gifts and
assistance in the testator’s lifetime affect entitlements; (d) whether
gifts made by a testator can be reclaimed by the estate; (e) which property is
subject to the jurisdiction of the court to overrule the will; and (f) whether
the protection against disinheritance is limited to a particular sum, and many
4 This second part will seek to identity
the options and the questions that should be dealt with. The key theme is that,
when Jersey considers reform of protection against disinheritance, legislators
should not fall into the trap of thinking that there are only binary choices
between protection of heirs and testamentary freedom; and between the current
Jersey approach to légitime
and the English model of the Inheritance Act 1975.
Importance of local attitudes and conditions
5 In Jersey politics of the 19th century
there were two rival factions, the Rose party and the Laurel party. Jersey
Museum records that there was also a third force in Jersey politics, comprising
those who assumed that the right way for Jersey was to do things in the British
way in all matters. This is always a problematic
assumption but imitation of the United Kingdom (and, in particular, England) is
common for reasons given by Jonathan Sumption, QC before his career in the
Jersey Court of Appeal was ended by elevation to the United Kingdom Supreme
Court. Speaking in the context of why judges in Jersey are often wise to follow
established English judicial practice, Sumption, JA said—
“In a relatively small jurisdiction, there
will be many issues which arise too rarely for the courts to have generated a
coherent body of indigenous legal principle. In the interests of legal
certainty, it is undesirable for the courts to reinvent the legal wheel each
time that an issue of principle arises which is not covered by existing Jersey
authority when there is a substantial and coherent body of case law available from a jurisdiction with which Jersey has
close historical links, with which, on most issues, it shares common social and
moral values and a common legal culture, and from which it derives most of its
criminal statutes.” [Emphasis added.]
6 There is undoubtedly a strong argument
that, were Jersey to wish to abolish légitime in favour of a court-based
discretionary system, it should not try to create a wholly novel system from
scratch. There would be an advantage to judges in Jersey not working out afresh
dilemmas which have direct equivalents in English (or, indeed, Irish) case-law.
Adopting the English system would effectively import the English case-law on
legal principles which, as with Ilott v Blue Cross, does not provide certainty
as to outcome but at least the degree of uncertainty will be known from the
start. To create a new system
might simply mean that Jersey courts would take decades to reach the same
7 However, if the comparative review in the
first instalment of this article has demonstrated anything, it is that there is
no right or wrong answer to the question of whether testamentary freedom should
be restricted by a fixed-rules system such as légitime, or a
court-based discretionary system such as the Inheritance Act 1975. If
jurisdictions such as New South Wales, Ireland, Gibraltar and New Zealand have
all taken the court-based discretionary approach, it should be recalled that
all of these jurisdictions started from the English tradition of testamentary
freedom. On the other hand, there is a very strong consensus in European
jurisdictions outside England and Wales to continue a fixed-rule system
guaranteeing inheritance rights to adult children. There is a conflict of ideas
but it is not one between modernity and out-dated paternalism. The right system
for a society is a function of its outlook on the social and philosophical
issues around testamentary freedom, whether adult children have claims on their
parents, and whether the idea of “family money” is a misnomer.
8 Of course, history and tradition is
not a complete argument as to why something should continue to be done. Meryl
Thomas and Brian Dowrick in an article in this Review on légitime reform concluded by saying that Jersey’s approach was closer to
that of civil law countries than common law jurisdictions.
This accounts for why Jersey’s law on this subject is currently more like
continental Europe than the common law world but it does not necessarily
explain what is right for Islanders today.
9 There is, unfortunately, a dearth of
information on what people in Jersey actually think. In the absence of any
material that achieved a higher rate of responses, we must look to the recent
consultation by the Trust Law Working Group (“TLWG”). The
consultation asked specifically about a trust law issue relevant to légitime, but also asked a general question as to
whether there should be reform of légitime.
10 The responses to the TLWG
consultation grouped as follows—
law firms responded to the questions on légitime;
trust companies responded to the questions on légitime;
(c) four individuals responded to the
questions on légitime,
of whom two were lawyers; and
associations gave brief comments.
11 Although only asked for an opinion on
reform of légitime, the
following views were expressed on the abolition of légitime—
(a) four of
the six law firms supported abolishing légitime,
the other two suggested consideration be given for broad reform;
(b) of the trust companies, two
supported abolition. One simply said, “yes” to the idea that there
should be reform, which could mean anything from abolition to fine-tuning;
the individual responses—
A was passionately against légitime;
B was passionately in favour, and gave a family story to explain why;
(iii) individual C (a lawyer) was neutral
as to reform; and
(iv) individual D (a lawyer) was passionate in
favour of légitime, and set out his reasons at length;
(d) both associations thought that
reform of légitime,
should be given. One association was favourable to the English model, but
thought it was “a matter of principle . . . for Jersey
residents to decide.”
12 In respect of consultations on légitime,
as with most things, it is important to place the views of lawyers in their
proper perspective. Such views are doubtless important in terms of identifying
inefficiencies in a system, advising on the workability of alternatives, and
knowledge of client concerns. However, whilst lawyers will almost certainly
figure heavily amongst those responding to a consultation of this sort and will
have much in the way of practical experience and suggestions to contribute, the
aim of any law reform must be to give the right answer for the people of the
Island. Such an answer must take into account the economic effects of the
doctrine of légitime insofar as the doctrine may deter some high
net wealth individuals from moving to Jersey. But the system also needs to work
for Jersey as a whole, and not just for the group most likely to grab the
attention of lawyers and the finance industry. There may need to be
considerable compromises of some interests but those interests should at least
be firmly in view.
13 But any consultation must have at the
forefront the position of ordinary Jersey residents. For example, the
importance of inheritance is a function of the importance of possessing capital.
When the importance of possessing capital increases (e.g. because opportunities of accumulating fresh capital from
income are restricted), this may increase the social significance of the
redistribution of capital accumulations by older generations.
The importance that a society attaches to inter-generational solidarity within
families may rise and fall, and will be relevant to the importance attached to
protection against disinheritance—including whether a court-based
discretionary system emphasises moral claims (as per Ireland), or need (as per
New South Wales).
14 With this in mind it is important for
legislators—and any concerned Islanders who participate in any public
debate on the subject—to consider the full range of options and issues as
to the “whether” and “how” of reform in these areas.
E. Human rights and discrimination
15 It has been argued that the present
system of légitime gives
rise to concerns in respect of human rights and discrimination. It is useful to
deal with such matters upfront. As there is often an assumption that
“rights are trumps”, to use Ronald Dworkin’s famous dictum,
raising such issues may serve to warn non-lawyers off from considering the
underlying rights and wrongs.
16 However, to say that human rights are
in play will immediately raise questions of justification; the same is true of
discrimination, which also raises questions of whether the person making the
accusation of discrimination is comparing like with like. These are issues that
are eminently suitable for public debate and legislative decision. Indeed, when
courts are faced with issues of justification for any measure, it is important
that they know that the decision made by the legislature or executive was
intelligently reasoned, taking into account relative factors. If it is, the
courts are more likely to defer to the decision-making body.
17 The Jersey Finance Ltd paper made
multiple mentions of human rights concerns in the context of the history of the
consideration of légitime
reform, in particular in respect of a report by Professor Meryl Thomas.
Professor Thomas has long taught the law of succession in the Jersey law
course, and is in an unparalleled position to comment on that system.
18 However, as set out above, Professor Thomas’s concerns related
solely to the issues of differential treatment for legitimate and illegitimate
Her particular concern was as to the position of “recognised”
children. By reason of the
enactment of art 8A and 8B of the Wills and Succession (Jersey) Law
1993, there are no outstanding human rights issues. When she and Brian Dowrick
wrote their 2013 article on légitime, they started with a clear statement that demands for abolition or
reform “can no longer be based on the argument that légitime does not comply with the
provisions of the European Convention on Human Rights”.
19 Anyone considering the rights and
wrongs of reform should be clear that human rights law takes no view on the
rights and wrongs of fixed-rule protection against disinheritance as against
and persons of high net wealth
20 The discrimination argument was
raised directly by Jersey Finance Ltd in the context of whether trust law could
provide the solution to the problem of deterring potential wealthy immigrants
from moving to Jersey. If we accept that the costs of creating and maintaining
a trust are a significant deterrent on their use, then the use of trusts to opt
out of légitime is materially
more available to those with greater wealth. Jersey Finance suggested that it
followed from this that the use of trusts as a mechanism to opt out of légitime was discriminatory—
“The issue of légitime—as it impacts upon the Trusts (Jersey) Law
1984 (the TJL 1984) was considered in the last round of meetings of the Trusts
Law Working Group (TLWG). The TLWG concluded (for a number of practical and
commercial reasons) that the references to légitime
contained in Article 9(1) and (3) of the TJL 1984 should be removed.
However, the TLWG were minded not only of previous
considerations surrounding légitime
more generally, but also of the potential ramifications of its request. The
TLWG were keen to avoid any prospect of an amendment to the TJL 1984 being
considered as ‘discriminatory’ i.e.
enabling the avoidance of légitime
by those wealthy enough to establish a Jersey trust, whilst denying the general
public the same testamentary freedom through a correspondent amendment of the
[Wills and Succession (Jersey) Law] 1993.”
Although framed in terms of trust law, the
discrimination objections would apply wherever the solution was targeted so as
to be more readily available to particular types of people.
21 As explained at the very beginning of
this article, the immediate argument for abolition or reform of légitime
lies with concerns over its effect on Jersey as a place to live for those
with considerable assets.
22 One law firm responding to the
consultation explained why légitime is a disincentive for individuals with significant assets from moving
become apparent that law firms in England (such as [W—]) are referring
ultra-high net worth individuals looking to relocate offshore to Guernsey (as
opposed to Jersey) because Guernsey no longer has any restrictions on
testamentary dispositions. This is resulting in business (and ultimately income
that could be enjoyed by the Island) going elsewhere.
We have clients that have relocated to Jersey only
then to find out about légitime
when coming to us for legal advice. The majority of clients have expressed
strong views on légitime and
some have seriously contemplated not changing their domicile purely on the
basis of légitime—even
though in some of these cases it results in them potentially falling within the
IHT régime in England, thereby subjecting their worldwide estate to 40% IHT
on death. In addition, at least two couples have contemplated relocating to
Guernsey in order to avoid légitime.”
23 This is a world apart from the
concerns of those involved in the Ilott case.
It is a world with little connection to those with comparatively modest estates
but instead belongs to that of people with estates running into the tens if not
hundreds of millions of pounds. Such people can choose where they live and
Jersey seeks to attract them to the Island with an immigration system which confers
tax advantages under the Income Tax (Jersey) Law 1961 to persons of high net wealth
or who are otherwise able to make an exceptional economic or social
Most come from the United Kingdom, and whilst many will have no objection to
splitting a third (or two thirds if widowed) of their property amongst their
children, some doubtless have objections to being required to do so. It need
not be matters of estrangement; it could be the approach famously adopted by
those such as Bill Gates, or Warren Buffett, or Gordon Ramsay, i.e. that no child should inherit so
much that they need never work hard themselves.
24 An obvious response is that, if the
impetus for reform/abolition lies with the particular concerns of the wealthy,
then cannot these concerns be dealt with in isolation without abolishing légitime? To raise that question requires
confronting the issue of whether having provisions more accessible to those of
high net value will be discriminatory.
The law must address—as most laws do—people with different but
overlapping concerns and interests. A solution to the problems of one section
of the population may be a problem for another. It is true that there should
not be one law for the rich and another for the rest, but this may gloss over
many practical arguments in favour of provisions that particularly target
people in different circumstances. There is indeed
already differential treatment for tax purposes in that special treatment is
accorded under the Income Tax (Jersey) Law 1961 for certain “wealthy
immigrants”. In respect of
protection against disinheritance, would it somehow be better to make just one
more provision that favours the rich?
25 Ultimately, any allegations of discrimination cannot be based on a
simple accusation of a difference being made either directly or indirectly. To
see if the vice of discrimination exists, there is a need to take a rigorous
examination of the circumstances leading to two separate but connected steps:
(a) deciding if the things being treated materially differently are the same,
and (b) if so, whether the different treatment is justified.
Hence, it can be seen—
(a) If the reason for
reforming légitime is a
conviction that testators should have greater testamentary freedom, then
there is no material difference between a rich and a not-so-rich testator, nor
any difference between someone who currently lives in Jersey and someone who
chooses to live in Jersey in the future; but
one of the reasons for reforming légitime is a concern for the
particular issues of the super-rich being obliged to leave such enormous sums
to children who need never work, then the super-rich do not sit in the same
position as others.
(b) If it is believed
that Jersey creates economic loss for itself because légitime
deters individuals of high net wealth from coming to Jersey, then—
is a material difference between those with or seeking reg 2(1)(e) status and
other Jersey residents by virtue of the fact that the class of high net worth
individuals may or may not choose to become Jersey residents by reason of the
state of Jersey law; and
is an economic justification for making a distinction.
26 The last paragraph has sought to
underline the fact that the complex issues involved in protection against
disinheritance cannot be readily reduced to invocations of discrimination. For
(a) Denmark has a
system which limits the extent of relief that can be available to claimants to
€135,000. This obviously means that their system restricts freedom much
more for testators with small estates than large ones. However, if a view is
taken that no one can deserve more than €135,000 by way of inheritance,
then such a difference of effect is inevitable, and justifiable by reference to
(b) The costs of any
inheritance disputes are obviously more damaging to smaller estates than larger
ones. A system such as the Inheritance Act 1975 may formally place larger and
smaller estates in a position of equality, as all affected persons may
challenge the reasonableness of testamentary provisions. However, such
challenges will not be equal in their practical consequences for the value of
the estate. If the costs of bringing and defending a challenge were to be
£100,000, that is a considerable proportion of an average movable estate,
but not so for large estates.
(c) Jersey residents
with significant estates are already able to avoid légitime to a very large extent. Even were it the case that
trusts would not be practical or cost effective for the average Jersey
testator, that person would have testamentary freedom in respect of their house
and could realistically convert any movable property into immovable property in
their lifetime. Such strategies are less available for those of high net worth.
It is one thing to plough £500,000 or £1m into immovable property
to keep it away from the children; quite another to do so with £50m–£100m.
So it is already the case that the principal avoidance strategy against légitime is entirely open (viewed
from the perspective of percentage of the asset concerned) to ordinary Jersey
residents. If a trust route would be more open to the rich, it could be seen as
levelling the playing field.
27 It is thus important not to see
“discrimination” as a broad spectrum ethical antibiotic to solve
complex issues such as those around (a) the choice between a “fixed-rule”
or a “court-based discretionary” system, and (b) the detail of such
regime. It is, in this context, simply an accusation thrown by someone who has
already decided that the other side is wrong. It does not help the undecided to
make up their mind.
F. Specific Issues
for consideration (and associated questions for consultation)
(i) Special treatment for non-residents /
Regulation 2(1)(e) residents
28 The European Succession Regulation
allows individuals to opt out of the inheritance jurisdiction of their country
of residence and back into their country of citizenship. Could an equivalent be
introduced in Jersey to allow those coming to Jersey to avoid falling into the
rule of légitime should that
be their wish?
29 However, there are significant
problems with adopting this approach—
(a) With the European
Succession Regulations, an individual does not just opt out of the rules of
their host member state, but back into the rules of their country of
citizenship. This is possible because EU law ensures that the country of
citizenship accepts jurisdiction. Jersey could not achieve this balance
(b) If Jersey cannot
ensure that the country of citizenship would have jurisdiction over the
relevant assets, could the Jersey courts resolve the matter by applying the
relevant foreign law? This is theoretically possible, as foreign law is
something that often needs to be proven before domestic courts, and is found as
a question of fact using expert evidence. However, whilst many Jersey
practitioners and judges would be familiar with the English law (or at least
come up to speed easily), there are scores of nationalities in Jersey. It would
be a difficult matter for the Royal Court to sensibly rule on matters of very
unfamiliar foreign law, and often prohibitively expensive to bring before the court
the necessary expert evidence for it to embark upon the problem.
30 More practical would be to allow
those who are in a position equivalent to that described by the European
Succession Regulation (i.e. living in
one place but not as a citizen) to simply opt out of légitime, and leave it at that. This might be
straightforward on a technical level where non-UK nationals are in issue but it
becomes more difficult to draw the dividing line where UK nationals have moved
(a) Would a person who
has acquired Jersey residential qualifications after 10 years count as a
“Jersey citizen” rather than just the United Kingdom?
(b) Or would the
dividing line be permanent Jersey residence?
(c) Or should those
with residency status under reg 2(1)(e) of the Control of Housing and Work (Residential
and Employment Status) (Jersey) Regulations 2013 be treated as something other
than “Jersey citizens” for this purposes?
31 As noted in para 25, above, the law
already provides those with reg 2(1)(e) status certain advantages. There is
already a two-tier system of law for reg 2(1)(e) residents under tax—they
are taxed differently under art 135A of the Income Tax (Jersey) Law 1961, so is
it any more inequitable if their estate has privileges under the Wills and
Succession (Jersey) Law 1993? Taxing statutes and protections against
disinheritance are both ways in which the state interferes with the free
use/retention of property. If one set of advantages (i.e. preferential tax treatment) are offered to induce persons of
high net wealth to move to Jersey, why not a further advantage in terms of
32 However, there are disadvantages
beyond natural concerns that legislators have in creating a separate law for
the rich. If individuals, particularly those with a definable reg 2(1)(e)
status, can opt out of légitime,
then what do they opt back into? Many with that status will have lived in
Jersey for decades by the time they die. Their heirs may well have been born
and grown up here. If we allowed a simple “opt-out” system for
those with reg 2(1)(e) status, then their relatives would lack protection both
under Jersey law and under the law of the reg 2(1)(e)’s
“ancestral” home country. All jurisdictions appear to regard as
objectionable a system where there was absolutely no protection against
disinheritance—so it would be a little odd for Jersey to create such a
result because it was uneasy that its system might be overgenerous to children.
33 In short, such an opt-out from the
Jersey law of légitime would
permit the very rich to opt into a system of absolute testamentary freedom. Jersey
would create for such people a legal position that appears to exist nowhere.
34 Hence, the question to ask is—
it feasible or justifiable for those granted reg 2(1)(e) residential status in
future to be permitted to opt out of the testamentary restrictions created by légitime?
(ii) Use of trusts and légitime
35 The recent consultation on légitime centred on whether the Trusts (Jersey) Law
1984 should be amended to change the relationship between trust law and Jersey.
relevant provisions are these—
“9(1) Subject to paragraph (3), any question
validity or interpretation of a trust;
validity or effect of any transfer or other disposition of property to a trust;
capacity of a settlor;
administration of the trust, whether the administration be conducted in Jersey
or elsewhere, including questions as to the powers, obligations, liabilities
and rights of trustees and their appointment or removal;
existence and extent of powers, conferred or retained, including powers of
variation or revocation of the trust and powers of appointment and the validity
of any exercise of such powers;
exercise or purported exercise by a foreign court of any statutory or
non-statutory power to vary the terms of a trust; or
nature and extent of any beneficial rights or interests in the property,
shall be determined in accordance with the law of
Jersey and no rule of foreign law shall affect such question.
(3) The law of Jersey relating to légitime shall not apply to the
determination of any question mentioned in paragraph (1) unless the settlor is
domiciled in Jersey.”
purpose of the provision is found in the remedy known as rapport à la
masse, see paras 39–42 of
the first instalment of this article (pp 134–136). If the testator had in
his lifetime given property to an heir (i.e. a child or a spouse/civil
partner), then the other heirs may apply to the court for an order that the
property should be restored to the estate. This Jersey law provision applies to
gifts whenever made, which contrasts with the Inheritance Act 1975 where the
clawback provision applies only to disposals which are made (a) within six
years of death, and (b) for the purpose of defeating the Act.
38 However, the otherwise sweeping remedy of rapport à la masse
has significant gaps in terms of preventing disinheritance in that addresses
only favouritism towards particular heirs in the testator’s lifetime. It
does not extend to gifts made to third parties during the testator’s
Hence, an adherent to Andrew Carnegie’s philosophy that “to die
rich is to die disgraced” may give away everything in their lifetime,
providing it did not go to a spouse/civil partner or children. Such a person
may give everything away on their deathbed to charity, or even to relatives
other than their descendants—whereas a claim for the estate to recover
such property could be made under the Inheritance Act if the other statutory
conditions were present. So, there are aspects to rapport à la masse
which are more favourable to freedom to dispose of property than the
Inheritance Act 1975 equivalents.
39 This is
where we must consider the use of trusts to avoid légitime. Conventional wisdom is that gifts to heirs
by way of trusts count as advancements on inheritance, although the principal
authorities to the point do not expressly decide the point.
purpose of art 9(3) of the Trusts (Jersey) Law 1984 was thus to limit the scope
of légitime (and thus
the remedy of rapport à la masse) to trusts where the settlor is domiciled in Jersey. There are two
points to underline—
(a) art 9(3) does not
expressly address the position of a settlement by a Jersey domiciled settlor
into a non-Jersey trust; and
(b) art 9(3) applies to
disapply the doctrine of légitime
when the “settlor is domiciled in Jersey”. Does this mean that the
settlor need only be domiciled in Jersey at the time of death, when the
doctrine of légitime comes
into effect? Or does it mean at the time of the transaction, which is when the
presumption of advancement of inheritance arises? Can someone be said to be
advancing an inheritance if they were at the time subject to a law where such
concepts making no sense?
41 The first point is quite
straightforward. The Trusts (Jersey) Law is to do with Jersey trusts. It does
not purport to make any difference to how settlements into non-Jersey trusts
would be addressed by doctrines such as légitime.
The conventional wisdom that gifts by way of trusts fall into the doctrine of rapport
à la masse remains as good (or
not) as it ever was.
42 It is the second point that needs
considering. If the doctrine of légitime
does not apply to settlements made before a settlor becomes domiciled in
Jersey, then trusts are a means of those taking up reg 2(1)(e) status to
arrange their affairs before moving to Jersey. As a matter of grammar, art 9(3)
is capable of being read in both ways, that is, (a) “the settlor is”,
present tense, at the time légitime
becomes an issue, or (b) “the settlor is” meaning when they are
carrying the action of being a settlor. If the former approach were to be
preferred, then the effect of the law of Jersey would be that, by becoming
domiciled in Jersey, the rights of beneficiaries in a trust may be effectively
changed by imposing on heirs a duty to return money to the estate depending on the
terms of the settlor’s will. It is also far from clear that the law of
Jersey has ever sought to apply rapport à la masse to transactions predating the link to
Given these difficulties, if the provision was meant to address settlors by
virtue of being domiciled at the time of death, then this could have been said
43 It should also be noted that art 9(3)
started life in art 8A of the Trusts (Jersey) Law 1984, inserted by the Trusts
(Amendment) Law 1989—
“(2) If a person
domiciled outside Jersey transfers or disposes of property during his lifetime
to a trust—
he shall be deemed to have had capacity to do so if he is at the time of
such transfer or disposition of full age and of sound mind under the law of his
(b) no rule relating to inheritance or
succession (including, but without prejudice to the generality of the
foregoing, forced heirship, “légitime” or similar rights) of
the law of his domicile or any other system of law shall affect any such transfer
or disposition or otherwise affect the validity of such trust.”
44 Article 8A of the Trusts (Jersey) Law
was renumbered as art 9, and was changed to its present form by the Trusts
(Amendment No 4) (Jersey) Law 2006. The relevant Jersey States Assembly
Proposition 29/2016. Nothing in the report or proposition suggests any policy
change. The Report states—
“The purpose of the Amendment is to clarify
and simplify the existing Law, and to bring greater certainty to key questions
concerning the validity of Jersey trusts and the powers that may be retained by
the settlor of a Jersey trust.”
45 Given that the wording in the
amendment is ambiguous, then it is right for the construction of the present art
9(3) to be informed by the previous wording. Resort to earlier versions of the
legislation is common when attempts by the draftsman to improve drafting create
Article 8A(2) was radically changed, which appears to forbid use of legislative
history, but on closer analysis there was no change in what was intended. The
problem with art 8A was that it assumes that légitime affects testamentary capacity, when it is a means
for children and spouses to apply (if they choose) for relief from the court.
The move from art 8A(2) to art 9(3) was not a change of policy or intended
result, but the aim was for the statute to employ the legally appropriate
language and concepts. The language of art 8A(2) was clearly there to remove
transfers and disposals made by non-Jersey domiciled persons from the scope of légitime. There is no suggestion
that any change was intended in this respect.
46 To conclude on this issue, the most
sensible construction of art 9(3) is that it takes out of the scope of légitime transfers and disposals
made by non-domiciled persons. This avoids retrospectively unsettling
transactions, and appears to be in harmony with pre-existing Jersey law on the
scope of rapport à la masse.
This conclusion is also supported by relevant legislative history in the former
art 8A(2). It follows that someone who is applying for reg 2(1)(e) status or
otherwise considering moving to Jersey can settle money in a Jersey trust
without being concerned about légitime.
Légitime and settlors who retain an interest
in settled property
47 It should be noted that the use of
trusts to avoid légitime
creates two different issues—
(a) as a delivery
mechanism of assets to children who would get more than “their fair
(b) as a means by which
a settlor can retain use of property in life, thus avoiding the need to give
the property by way of a will, when légitime
48 It is the second issue that is
considered in this short section. What if a gift in the life time is in fact
only given on death—is that not a form of avoiding légitime? A trust can be used to simultaneously give
property away, and yet retain an interest in it. A
considerable amount of UK anti-avoidance tax law aims at eliminating all possibility
of a settlor having any possible future enjoyment of the property,
although, as all law students know, the area can be highly technical with
unexpected failures leading to unexpected liabilities. This
is because the policy behind the UK tax legislation requires that an individual
should not be treated as having given away property, having created a structure
whereby he can enjoy it if he really wants to. If Jersey wants to be strict on
what amounts to avoiding légitime,
then similarly a person should not be able to use a trust so that they only
part with property on death—because parting with property on death is
something that should be done through the laws of succession and by making a
49 However, the anti-avoidance doctrines
in légitime do not attempt to
take such a purist view. The rules address gifts to heirs by looking solely at
the advantage of the heir—the rules do not address avoidance strategies
around the position of the testator. There is no rule to prevent the testator
giving more than the “disposable third” to non-heirs, whilst
retaining significant enjoyment (but not ownership) of the property and its
income within the testator’s lifetime. The
Scottish authority of Coats’s Trs v Coats,
provides a strong persuasive authority that doctrines such as rapport
à la masse are not capable
of expansion by analogy. Hence, it is questionable whether it should be brought
into the field of discretionary trusts where the heirs have no enforceable rights
to any benefits.
Proposals for reform
50 The reason for the Trust Law Working
Group consultation questions on légitime
was essentially this: should it be possible for a testator to take property
outside of the scope of légitime
by way of a trust.
51 The reason for this being of acute
interest today is that, as explained above, objections to légitime have arisen amongst persons of high net wealth, who
are deterred from either moving to or staying in Jersey by reason of losing
52 The question arises as to whether the
law of Jersey should be reformed so that gifts into trusts made in the testator’s
lifetime should be excluded from the scope of légitime.
53 The advantages of using trust reform
to deal with concerns in respect of légitime
(a) Persons with
significant assets and concerned to avoid légitime
could put money into trust which on their death would accrue to their children
or any other person of their choice without rapport
à la masse applying (i.e.
the assets could not be brought back into the estate, and then redistributed in
a manner contrary to the wishes of the testator).
(b) The reform could
allow for significant control of the benefit of the trust by the settlor in his
or her lifetime.
(c) The settlor need
not alienate all of his or her lifetime interest in the property.
(d) The use of family
trusts settled in a testator’s lifetime are common means for managing
wealth where significant amounts are in issue, as is the concern of Jersey
(e) If we adopt the
English Inheritance Act approach, wills would be subject to new forms of
uncertainty, including challenges under an equivalent to art 10 of the
Inheritance Act 1975 (i.e. transactions
within six years of death to defeat the possibility of claims under the 1975
Act). By adopting a trusts solution within the structure of légitime, we could avoid
testators being in the position of having to make a “calculated
risk” that the decision to “disinherit” would have problems
in the court, as is the case with the 1975 Act. A trusts solution within légitime would provide certainty.
(f) For reasons
set out above—
a person sets up a trust prior to moving to Jersey (e.g. after grant of reg 2(1)(e) status, but before taking up
residency), then art 9(3) of the Trusts (Jersey) Law 1984 already operates in
settlor can avoid légitime
insofar as the trust does not make absolute gifts to his or her children, e.g. includes other relatives, friends,
good causes as beneficiaries of a discretionary trust.
is no rule in légitime
equivalent to that found in UK tax legislation that, if a settlor can benefit
from a trust, he or she is treated as remaining the owner. Hence, the fact that
a settlor retains enjoyment of trust property to any degree will be irrelevant
to the fact that a gift had been made during his or her lifetime, and not as a
disguised testamentary procedure.
Hence, law reform in
this area can reasonably be seen as bringing clarity rather than change.
54 The disadvantages or objections to
using trusts for reform are—
(a) If we accept that
the costs of creating a trust are a significant deterrent on their use, then
the use of trusts to opt out of légitime
is materially more available to those with greater wealth.
(b) Jersey Finance Ltd’s
logic, combined with that of the Trust Law Working Group, appears to be
is a concern that persons of high net wealth may be deterred from moving to
Jersey by reason of légitime;
use of trusts may provide a means to deal with that problem;
the use of trusts as a means to achieve testamentary freedom would discriminate
against those of lower wealth, for whom structures are less available;
as the use of trusts in England and Wales to protect married women’s
property from rapacious husbands was only of use to the rich, so the use of
trusts to avoid légitime would
give testamentary freedom only to the rich.
(c) Conceptually, if
there is a need to legislate to provide a means for people to avoid a rule of
law, then this brings into question whether the relevant rule serves a good
purpose. Unless the mechanism for reducing liability under the relevant rule
has a value in itself (e.g. reducing
liability tax by spending money on something socially useful, like charitable
causes), then what exists is a means to avoid a rule of law by way of a
pointless rigmarole. So if the rule concerned is useful, the valueless means of
avoidance should be abolished; if the rule is not useful, then it should not be
maintained for those who do not spend time and money avoiding it by doing
something otherwise pointless. (However, it should be remembered, that where
legislation must draw a balance, it may often result in a compromise that is
theoretically unsound. A lack of theoretical purity is often not just tolerable
to legislators but a necessary part of compromising the conflicting demands of
different parts of a complex society.)
(d) Although family
trusts are common, a settlor, by making a trust, may lose control or use of their
property to a degree that they find unacceptable or at least premature. They
may feel they are substituting one loss of control for another.
55 It follows that trusts provide a
means for avoiding légitime,
and are particularly useful for those considering moving to Jersey. There is
uncertainty as to how far légitime
applies to trusts. The relevant authorities are obiter.
The extent to which the doctrine of rapport à la masse can be extended by the courts by analogy is
doubtful—the courts could take a strict approach to undoing advancements
of succession, or draw a line in the scope of the doctrine as suggested by
The only thing that is tolerably clear is that it does not apply to settlements
prior to becoming domiciled in Jersey.
56 The questions that need to be
considered in respect of these issues are thus these—
gifts into trusts be excluded from the scope of légitime?
gifts into trusts are in principle excluded from légitime should there be any anti-avoidance rules? For
example, the Inheritance Act 1975 allows for the clawback of dispositions made
within six years of death for the purpose of defeating rights to make
applications for relief under the 1975 Act, should there be something
gifts into trusts are to be excluded from the scope of légitime, is it necessary that the testator wholly dispose
of his or her enjoyment of the property settled in the trust? In other words,
should the testator be able to continue to enjoy benefits of ownership during
his or her lifetime? Or would it be too complicated to take such a purist
approach, noting the complexities created where UK tax law has of policy
necessity sought to ensure that settlors could retain no interest?
(iii) Reform of légitime
57 Certain issues have arisen in the
course of this paper where there is a tension between the arguments in favour
of retaining légitime (or at
least criticisms of the alternative approach) and the reality of légitime as it present exists.
58 The principal point is that légitime protects children from
arbitrary decisions by the parents. It follows from the starting point that
there is a concept of family property, against which children have
expectations, and the fairest way forward is to guarantee an equal minimum. The
explanation given to the European e-Justice Portal by the Federal Republic of
Germany encapsulates the point—
“[A] situation in which the surviving spouse, children and
children’s children or parents were to receive no inheritance at all,
even though they would have been the legal heirs if the testamentary
disposition had not actually existed in the first place, has always been
regarded as unjust.”
59 However, the present system allows
the following to happen—
(a) The parent to make
entirely different provision for children (or disinherit them entirely) where
immovable property is concerned. Hence, Jersey law may allow a child to be
disinherited without any redress from what is typically the larger part of the
(b) A parent who wanted
to disinherit a child could simply convert cash investments (movable property)
into land (immovable property) and thus gain absolute testamentary freedom.
(c) A parent who wishes
to disinherit a child can simply give their movable property on their deathbed
to a third party and it will not be subject any clawback. In that respect, the
Jersey system provides less protection against disinheritance than is found in
England, where s 10 of the Inheritance Act 1975 allows for the clawback of
dispositions made to thwart inheritance rights.
(d) Where a child has
received a disproportionate share of the testator’s immovable estate,
that child can still claim that he/she should receive his/her legal share of
the movable estate.
If the aim of légitime is to
ensure a measure of equal treatment, the exclusion of dispositions of immovable
estate from consideration is difficult to justify.
60 The Scottish Law Commission
recommended as one of its options for “legitim” to reduce the
entitlement of children from one third to one quarter but for the scope of the
doctrine to be increased to cover immovable property. The Scottish Government
was particularly concerned that the absence of what is usually the most
important family asset from their doctrine of “legitim” greatly
reduced the protection from disinheritance, particularly by providing a means
for easy avoidance.
61 As set out above,
the doctrine of légitime
as currently expounded lacks the tools to enquire into whether a discretionary
trust for subjects not limited to heirs is in substance a gift to heirs, or
whether trusts for third parties are disguised testamentary procedures by
reason of the settlor having in substance given to the trust but retained
enjoyment for life. A proper consideration of the policies behind légitime will not just allow
consideration of whether it should have any place in modern Jersey law, but how
supporting doctrines such as rapport à la masse can be reformed (or abolished) so as to
meet modern issues thrown up by trusts.
62 Another issue arises around family
relationships. There is no possibility of “children of the family”
counting alongside natural and adopted children. Hence, consider this
(a) Adam marries Beryl.
(b) Beryl has a two-year-old
(c) Adam cannot adopt
Cheryl, as the natural father, Daryl, remains in occasional contact.
(d) Adam is granted
(e) After Cheryl
becomes an adult, Beryl dies.
(f) Adam marries Edwina.
(g) Adam writes a will
leaving everything to Edwina.
(h) Adam dies.
63 On such a scenario, Cheryl would have
rights to make an application under most court-based discretionary systems—the
lack of a biological relationship would not matter. Under Jersey’s system
of légitime, Cheryl has no
rights. Whilst it is doubtless an advantage of court-based discretionary system
that they can have the flexibility to recognise the full variety of human
circumstances, consideration could be given to whether clear rules could be
created in Jersey’s fixed-rule system to recognise clear “child of
the family” scenarios.
64 The Scottish Law Commission
recommended that its version of rapport à la masse (i.e. recovery of gifts made by testator
to other heirs) should be restricted to a duty for those challenging their
provision under the will to bring back gifts that they had received. It would
not be possible for a sibling (or parent or step-parent) to complain that
someone had received too much from the testator in life, e.g.—
T dies leaving £900,000 in cash. £400,000 goes to charity (i.e. four ninths). £300,000 goes
to Spouse X (i.e. one third). £100,000
goes to Son A (i.e. one ninth). £100,000
goes to Daughter B (i.e. one ninth).
Father T had given Son A £500,000, but nothing to his daughter.
Son A and Daughter B, have received one ninth of the movable estate—when
their legal entitlement was to a minimum of one sixth.
X has received one third, which is her legal entitlement.
the Scottish proposals—
A cannot make a claim without bringing back his £500,000 gift, which
would be foolish.
B can bring a claim but it will not affect the unequal disposition made in his
life time by her father to Son A.
currently under Jersey law, as the gift to Son A was in excess of the “disposable
third” of the testator’s estate, both Spouse X and Daughter
B can make a claim for Son A’s £500,000 to be returned to the
estate, and for everything to be recalculated from there.
65 Such a system the Scottish Law
Commission believed did greater justice than the system of collation which
allowed (as with rapport à la masse) for the clawback of gifts made years earlier. It is worth noting that
this underlines how it is not so simple as saying that a fixed-rule system
favours children and spouses, and a court-based discretion system favours
testators. Under the Scottish proposals, a gift to child would be final unless
the child concerned decided to challenge the will—whereas in the English
system, any transaction of the testator may be challenged if it was done to
avoid the assets falling into consideration under the Inheritance Act.
66 The Scottish Law Commission raised
the issue of restricting “legitim” (or, rather, a new fixed-rule
system) to dependent children, this was their option 2. The theory behind such
a move would be that the legal entitlement to the estate should only exist
where there is a legal duty to support. The
entitlement would not be to a fixed amount of the estate, but to an amount
calculable by fixed rules, e.g. the
claim of a newborn would be higher than that of a child of 17 about to leave
home. It is a claim for the loss of support to which a child would have had a
legal entitlement from the deceased parent—and is not really out about
moral claims to inheritance.
67 The questions for consideration in
respect of the reform or abolition of légitime
Q.5 If légitime is retained, should it
apply to the immovable estate?
Q.6 If légitime were to apply to the immovable
estate, should the proportions by which it applies be changed?
légitime (or rather a
different form of fixed entitlement) be restricted to spouses/civil partners
and dependent children?
the answer to Q.7 is yes, then should the definition of “dependent
children” be limited to those under 18 or in full-time education but no
older than 24? Should it include dependent, disabled adult children?
there is a fixed entitlement for dependent children, is it possible to follow a
“mixed” approach, and create a court-based discretionary system for
Q.10 Should the ability to apply to court to
oblige other heirs to return property to the estate (i.e. rapport à la masse) be abolished?
Q.11 If rapport à la masse is not abolished, should there be a limit as
to how far back it is possible to make a claim for a gift to be undone?
Q.12 Should rapport
à la masse include gifts to third parties made for the purpose of
defeating legal entitlements under légitime, e.g. importing the approach of the
Inheritance Act 1975 to such dispositions where they are made within six years
of death and made with an avoidance purpose?
Q.13 Where an individual claims their légitime they are required to
bring back into the estate gifts of movable property made by the testator in
his or lifetime. Should this apply to legacies of immovable property made under
the will or before?
Q.14 If rapport à la masse is retained, should the rule in the Loi (1960) modifiant le droit coutumier
excluding immovable property from the doctrine be abolished?
(iv) Change to a
court-based discretionary system for protection against disinheritance?
68 As has been explained at length, the
question not a binary question of testamentary freedom against rights for
children and spouses/civil partners, but the relative importance attached to
both concepts in different areas. It is as Baroness Hale said in Ilott v Blue Cross—
“In his book on The Inheritance (Family
Provision) Act 1938 (Sweet
& Maxwell, 1950), Michael Albery commented:
protection of the rights of the family as an essential unit in society is a
primary concern of most systems of law. Complete freedom of testation, as
enjoyed under English law for a brief period of 47 years, is therefore by the
standards of contemporary jurisprudence an anomaly.’
In many modern legal
systems, mostly those descended from Roman Law, complete freedom of testation
is unknown. Members of the family enjoy fixed rights of inheritance to the
estate of a deceased, which leave only limited scope for the deceased to make
his own dispositions. In some systems, consanguinity is preferred to affinity.
The claims of descendants of the deceased are favoured over the claims of a
surviving spouse. The theory is that the property belongs to the family or
lineage rather than to the owner for the time being and should pass down the
blood line. Other systems favour affinity over consanguinity. Early English law
also recognised certain fixed rights of inheritance, but these were only
between husbands and wives, and the limited rights given to widows and widowers
disappeared long ago.”
What is now the Inheritance Act 1975 thus started
life as a rejection of testamentary freedom.
69 Baroness Hale at length set out
recent studies into attitudes in England
and Wales into protection against disinheritance. She concluded—
“It will therefore be seen that,
unsurprisingly, there is a variety of reasons why people believe that
descendants should be entitled to a share of the deceased’s estate. The
bloodline or lineage is undoubtedly one of these, and seems to have featured
strongly in both studies. Another is need, whether stemming from disability or
poverty, although others felt strongly that descendants should be treated
equally irrespective of need. And a third is desert, having earned a share by
caring for the deceased or contributing directly or indirectly to the
acquisition of his wealth.
The point of mentioning all this is to demonstrate
the wide range of public opinion about the circumstances in which adult
descendants ought or ought not to be able to make a claim on an estate which
would otherwise go elsewhere.”
70 Of course, Baroness Hale was
reviewing the history of opinion and research into opinion in England and
Wales. Scotland is entirely different. Whilst
the English discussions have always rejected a move towards a fixed-rule system
for protection against disinheritance, Scotland retains such a system and the
present options for reform being discussed do not include moving to such a
court-based discretion system.
71 Ultimately it is a matter of what is
right for Jersey, taking into account the size of estates, the prospects of
litigation, and the extent of costs that may be incurred to by the affected
estates. With this in mind the final comments must be these—
(a) Most important are
the issues around costs of litigation—
costs of litigation under the Inheritance Act 1975 typically fall to be paid
from the estate.
The impact of this important aspect of the system creates a greater proportionate
cost on smaller estate. Inheritance Act litigation where the amounts involved
are in the hundreds of thousands may destroy the estate down considerably,
whereas fixed-rule entitlements being clear could be cheaply enforced. Even if
a court discretion based system were the ideal, it is necessary to consider
whether it would be genuinely open to all, or open to all “like the
cost of the equivalent action in légitime
(“reduction ad legitimum modum”)
is known to be a cheap action.
may be greater costs when a rapport à la masse action is taken
for an heir (i.e. descendant or
spouse/civil partner) to return gifts to the estate. However the equivalent
action under s 10 of the Inheritance Act 1975 would be possibly more complex,
necessitating enquiry into the motives of the testator in making the gifts.
(b) In short, under the
Inheritance Act 1975, a person who “disinherits” a child takes a
“calculated risk” that an application may be brought, and that
litigation will result.
In creating a risk of litigation, it must be noted that such litigation is
likely to be more complex than where a challenge involves the application of a
fixed rule, as is the case with an action for rapport à la masse
under the rules of légitime.
(c) The Jersey Finance
Ltd paper referred to “perfunctory and casual criticism” of the
1975 Act, as it being “unsupported by any evidence”.
In particular, the paper criticised as unsupported the view that the Inheritance
Act 1975 protections against disinheritance were “objectionable on the grounds of unpredictability and the likelihood of
family acrimony”. However, such criticisms have been powerfully
spelt out by Baroness Hale (joined by the Supreme Court’s leading family
judge) when she concluded her speech in Ilott
v Blue Cross—
have written this judgment only to demonstrate what, in my view, is the
unsatisfactory state of the present law, giving as it does no guidance as to
the factors to be taken into account in deciding whether an adult child is
deserving or undeserving of reasonable maintenance. I regret that the Law
Commission did not reconsider the fundamental principles underlying such claims
when last they dealt with this topic in 2011.”
(d) The Ilott v Blue Cross case makes it clear
that the results of Inheritance Act litigation are uncertain—and that a
very wide variety of outcomes were legally acceptable depending on the
discretion of the first instance judge.
(e) As is clear from Ilott v Blue Cross, the results turn on
the approach of the first instance judge. Adoption of an Inheritance Act 1975
system ultimately delegates Jersey’s approach to the small corps of first
instance judges in the Royal Court.
(f) It should
also be noted that the English/Welsh Inheritance Act 1975 system is not the
only model for a court-based discretionary system—
would be possible to adapt the Irish Succession Act 1965 model which emphasises
“moral duty”. This carries with it the possibility of discharging
that duty to particular children whilst alive.
the Irish system shows that it is possible to retain a fixed-rule system for
spouses, and create a discretionary system for children.
would be possible to have a fixed system for spouses and dependent children,
and a discretionary system for non-dependent children.
New South Wales system, which restricts claims to issues of “maintenance,
education and advancement”, which leads to greater statutory focus on the
nature of the child’s claim.
72 The questions to be considered are
Q.15 In principle should Jersey move to a
court-based discretion system for protection against disinheritance?
of mixed system. Should Jersey move to a court-based discretion system for
children (or alternatively non-dependent children) but retain the present
fixed-rule system for spouses/civil partners (i.e. the Irish model)?
property. If Jersey moves to a court-based discretion system, will it be
necessary for such a system to include immovable property in its remit as well
as movable property?
Q.18 If Jersey moves to a court-based
discretion system, should it adopt the English/Welsh Inheritance Act 1975
model? Are there aspects of other models that ought to be adopted?
under a court-based discretion system. If Jersey moved to a court-based
discretion system, should the potential beneficiaries be broadened from the
present system where only spouses/civil partners and descendants have protection?
If so how, noting that the rules for who may claim differ between systems?
of application. Alternative, if Jersey moves to a court-based discretion
system, should it adopt the Irish system of focusing on “moral
duty” rather than the English system of “reasonable
of relief that may be granted. Alternatively, if Jersey moves to a
court-based discretion system, should it adopt the English/Welsh approach to
the support that can be claimed from the estate, or provide greater definition
(e.g. New South Wales and
“maintenance, education and advancement)?
Q.22 What arrangements should be made as
regards costs of claims?
Q.23 Noting any equivalent areas of law where
mediation has been used in Jersey (e.g.
family law), to what extent is mediation likely to reduce concerns that a court
discretion based system in Jersey will lead to the erosion of estates through
litigation costs? Will there still be significant legal costs in terms of
initial advice, advice on settlement, and settling contracts?
Q.24 Is it a concern that, following the
critique made by the UK Supreme Court in Ilott
v Blue Cross, that the adoption of the Inheritance Act 1975 system would
mean that the ultimate balance between “testamentary freedom” and “protection
against disinheritance” in Jersey will be depend on the discretion of
whichever first instance Royal Court judge hears the case?
Q.25 If the breadth of discretion given by the
Inheritance Act 1975 to first instance judges is a concern, are there any
suggestions as to how to make decisions more systematic?
Q.26 If a new system were extended to address
dispositions of immovable property, what changes would be required in respect
of present rules in respect of dower and rights in the nature of dower under
the Wills and Succession (Jersey) Law 1993?
whether Jersey remains on the continental side of the Channel in this issue, or
moves to the English side, is not and should not be a matter for lawyers. It is
a matter not of pure logic, and certainly not legal logic. It is true that
attitudes in Jersey are likely to be influenced by attitudes coming from
England and Wales, yet different attitudes will have come from Scotland,
Portugal or Poland. Different attitudes again may have come from Ireland, where
a court-discretion based system of protection against disinheritance exists for
children (but a fixed-rule system exists for spouses), and where issues of
moral duty are more to the fore in the use of the court’s discretion.
74 It is noted that the near neighbours
of Guernsey and Alderney have both changed to the English system.
However, the extent of debate on the subject was called into question by Sir
Vic de Carey, the former Bailiff of Guernsey.
75 The purpose of this article, as with
the review by the Law Officers on which it is based, is simply to draw
attention to the complexity of the subject. If Jersey is to abandon a part of
its civil law inheritance, it should not do so on the basis of misguided
invocations of modernity or discrimination. It should be abandoned, if at all,
for the one good justification for all law reform in Jersey—does the law
still work for the good of Jersey as perceived by the people of Jersey?
76 What should be clear is that there
are considerable difficulties with the present English legislation. There has
been a call by the Supreme Court for it to be reformed. If Jersey wishes to
take the step towards a court-based discretion system, it should consider
aspects from legislation in other states. For example, legislators might wish
to better define the nature of the moral obligation that gives rise to an
entitlement to an adjustment in a will. The explanation in the Supreme Court
that widely different results can legitimately be taken by first instance
judges under the Inheritance Act is a strong argument against simply adopting
the English approach.
77 As regards Jersey’s system of légitime, if the concept of a fixed-rule
based system is preferred, there are many obvious ways in which Jersey’s
current system fundamentally fails to carry through that logic. The fact that
immovable property is left out of account can create capricious results. If we
believe in the moral rights of spouses and children to inherit, then this
should apply to the major asset of most estates. Also the present law allows an
unscrupulous child who receives the bulk of their parent’s estate in the
form of land to present themselves as disinherited for légitime purposes, concerned only as it is with movable
property. The issues of the finance sector can be considered without the
assumption that the solution must be universal, or of equal use to all in
Jersey regardless of wealth. The use of trusts to avoid légitime does run against the basic philosophy of the
doctrine but not against the idea that is always a balance that is sought. They
can be considered. But possibly the real answer to the concerns of the super
wealthy are found in the Danish approach.
78 There is no reason why légitime should apply to the
entirety of a testator’s approach. In Denmark, a disinheritance claim is
limited to €135,000. That might be a little low, but the Danish approach
shows that there are easier ways to deal with the legitimate concerns of those
of high net wealth than to embrace the English system. The question of a cap to
légitime claims can be
considered. Of course, some will wish to disinherit children completely—some
for reasons of stern parenting, some out of malice, and some because the
children cannot be trusted with money. It is impossible to cater for all. However,
thought should be given to the New South Wales approach that moral claims on
parents diminish if previous support has been given—there is no reason
why the cap on claims should not take into account gifts made to the child,
unless such gifts are brought back into the estate. That doubtless raises
questions as to how to operate the doctrine of rapport à la masse.
79 Lord Hoffmann in Re Barker said—
“I am conscious of the pride which the legal
profession in this Island takes in its unique legal system but such pride can
only be justified if the legal institutions are sufficiently adaptable to
enable the Court to do justice according to the notions of our own time.”
Ultimately, if the
desire is to retain légitime then
there must be a comprehensive analysis of how to reform it, such as undertaken
in Scotland. There is nothing un-modern about a fixed-rule system, but if there
is to be fixed-rule system, it needs to be more internally coherent than the
present set of rules.
Dixon is an advocate of the Royal Court and a Legal Adviser at the Law Officers’
Department, Jersey. Any opinions expressed are his own, and should not be taken
to be those of the Law Officers’ Department.