As of 1st October 2014, changes to the Intestacy rules came into force. This follows the enactment of the Inheritance and Trustees Powers Act 2014, the principle behind the previous rules have stood since 1925.
What has changed?
The new rules are more generous to surviving spouses and thus consequently less generous to the children. The previous use of a life interest trust to provide for the spouse during their lifetime but ensure that the funds ultimately passed to the deceased’s children has been abolished.
Moving forward, a surviving spouse will be entitled to the first £250,000 of the estate plus all the chattels (moveable personal property) plus half of any remainder whilst the children will receive the remaining half. This can be particularly disadvantageous to the children when the surviving spouse is not their parent. If there are no children then the surviving spouse inherits the entire estate with no provision for other relatives.
What will the impact be of this change?
It is yet to be seen how this will play out, but it is unlikely to be how most people would want their estate to pass and therefore it is even more important to ensure that your Will is up to date. The rules for spouses apply equally to civil partners and would apply even if the deceased was estranged from their spouse/civil partner.
Despite the update the intestacy provisions still make no provision for unmarried couples regardless of how long standing their relationship. If you are in this situation it is imperative that you and your partner make Wills urgently.
If you have yet to arrange and update your Will, please feel free to contact me on 01604 828 282, by email, or comment below to ask a question. I’d be pleased to help.