While surrogacy law can be criticised for not being fit for purpose, there is at least a solution in place that is cumbersome. When it comes to the impact of death of one of the parties, while already a traumatic event, a barefaced lacuna in the law causes the problems to go from bad to worse. The legal parents are not correct, the inheritance tax regime does not align, and the guardianship provisions are unnecessarily complicated.
Current problems
The interplay between succession laws and surrogacy was not given sufficient thought at the introduction of the HFEA 2008.3 The issue varies depending on who dies and when:
Under the current legal regime in England & Wales, the surrogate is a legal parent to any child born to her. If she is married, her husband, wife or civil partner is the second legal parent. If she dies before making a parental order, the surrogate child is her child in law and would inherit part of the estate. Clearly, making a valid Will currently addresses this problem, but, importantly, subject to the child making a claim under the Inheritance (Provision for Family and Dependants) Act 1975 before the grant of a parental order.
If the surrogate is married, the same applies to her husband, wife or civil partner on their death.
If the intended parent dies, regardless of genetic connection, the surrogate child will not be considered their child unless specific provisions are made in their Will. The exception is where the surrogate is single, and one of the intended parents is therefore considered the second parent.
If the child is not a legal child of the deceased, they will not benefit from the Main Residence Nil Rate Band of £175,000 (subject to a £2m cap).
No payments for the surrogacy journey are enforceable against the deceased and so any promise to support her or meet expenses will be at the direction of the beneficiaries in the estate.
The proposals by the Law Commission and logic can be followed as this for those entering the New Pathway:
The intended parents become the legal parents from birth. Therefore, there is no longer a ‘gap’ between birth and the parental order to be filled for inheritance tax and guardianship provisions;
Payments will now be enforceable against the estate if it is in the approved and agreed surrogacy agreement. The surrogate can have confidence that if anything happens to the intended parents then she will no be left out of pocket;
There is an extension of the ‘en ventre sa mere’ principles, under section 55 of the Administration of Estates Act 1925, so that it applies to the child who is still in the womb and being carried by a surrogate at the time of death of one intended parent. This brings the law into line with what would happen for non-surrogacy journeys.
As the second legal parent will no longer be a spouse or civil partner of the surrogate, the child will always now be able to inherit from one of the intended parents without specific Will provisions. This could include a genetically related intended father or pursuant to the HFEA 2008 it could also be the intended mother or the (genetically unrelated) intended father.
The presumption of legal parenthood will move to the intended parents and as such the guardianship provisions in their own Wills (if they have them) are going to come into effect.
Those who do not benefit from these proposals are:
On the New Pathway, if the surrogate withdraws her consent pre-birth and therefore becomes the legal parent at birth, only one of the intended parents could benefit until any Parental Order is made to the contrary.
Anyone not on the New Pathway, i.e. on an international or independent journey, will not be able to able to benefit from points 1 and 2, but the intended parents may partially benefit from points 3, 4 and 5.
If any party has made a Will contrary to the assumptions, the new provisions will not displace that Will. Everyone would be well placed to update their Wills still on the advent of a surrogacy journey and seek specialist advice.
It is a curious addition to the Report that the making of a Will, to give certainty to all involved, was not part of the requirements to enter the New Pathway. The Law Commission preferred to focus on the screening and safeguarding requirements, while still acknowledging the importance of Wills. This does follow the general policy of testamentary freedom (including the right not to make a Will), but they (rightly) anticipate that all qualified and informed solicitors and Regulated Surrogacy Organisations will strongly encourage parties to update their Wills to avoid falling into pitfalls. This helps people who are likely to go through the New Pathway but leaves independent or international surrogacy journeys no better off.
There will similarly be no reform of intestacy rules or the child’s right to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (before the grant of a parental order). Curiously the Law Commission considered this would provide an incentive for surrogates to update their Wills and for intended parents to be pushed towards the New Pathway. In part, this was because of their push towards the New Pathway but some sympathy can be given to them for deferring to the previous Report by esteemed colleagues on “Intestacy and Family Provision Claims on Death (2011) Law Com No 331”… not that anything appears to have come from it sadly.
The Guardianship provisions do not, strictly, need to be placed in a Will. The reforms do not change this either way but they do impact who has the ability to appoint a guardian and in which circumstances. Again, those who do not fall onto the New Pathway need to be conscious of the weakness in their position and plan accordingly.
Conclusion
The new proposals make for pleasant reading in most areas, albeit still not going far enough to protect everyone; unless you can enter the New Pathway, it leaves you in almost all circumstances in the same position as before - out in the cold.
