New Intestacy rules are no substitute for a properly drafted Will
The intestacy rules – that is, the rules for distributing estates where the deceased has not made a Will – changed from the 1st October for the first time since 1925.
The Inheritance and Trustees’ Powers Act 2014 came into effect in England and Wales. The legislation introduces a number of important changes, based on the recommendations of the Law Commission, to a multitude of issues that affect Will drafting and the administration of estates.
Where old intestacy rules benefitted blood relations like siblings and parents, the new rules are better for spouses and civil partners – but unmarried partners are still out in the cold.
Married couples without children
One of the biggest changes is for married couples and civil partners without children. Under the old rules the survivor received the first £450,000 plus half the rest. The other half was split between blood relatives according to strict rules. Under the new rules the survivor receives everything.
Married couples with children
For married couples and civil partners with children the theory of “life interest” is now eradicated. The new rules are significantly simpler, with the survivor entitled to the first £250,000 plus half the remainder. The children share the rest. Previously the spouse only got a life interest in half the remainder i.e. they received the income from their half but the capital was protected for the children.
One of the controversial parts of the new rules is around the modern family i.e. who receives what if you were co-habiting. Many professionals were pressing for those in unmarried relationships to receive a portion of their partner’s estate if they die without a Will.
At present, unmarried partners are legally entitled to nothing even if they share children or have cohabited for many years. The new laws do not change this. Die without a Will and your partner receives nothing. Their only recourse is to make a claim against your estate.
Claims against the estate
One of the other significant changes is to the scope of people who are entitled to claim against your estate. As well as redefining who is classified as a dependant the new rules now recognise the ‘blended family’. For example, your partner’s child can now claim against your estate as if they were your child. This applies even if your partner died before you, but this doesn’t automatically mean they Will be successful if a claim is made.
While the new intestacy rules are good news for a surviving partner, they highlight the importance of making a Will. The costs of administering an intestate estate are often substantially greater and if you want to choose who inherits what you need to have a well-drawn Will in place.
Above is just an overview of the main changes that Will affect decisions when making a Will. There are other technical changes, including certain powers of Trustees, and the definition of personal property as ‘chattels’, that we have not covered.
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