From 1 October 2014, the UK intestacy rules have been amended by the Inheritance and Trustees’ Powers Act 2014.
Married Couples/civil partners no children
Before the changes, where a spouse or civil partner died intestate (without a valid Will) and with no children, the first £450,000 and a half interest in any amount over this would be left to the surviving spouse/civil partner, with the rest being held for the blood relatives. Meaning, the parents of the deceased often inherited.
If you consider a married couple, George and Paula, they have been married for 5 years and have no children. Unfortunately, Paula dies, leaving an estate of £750,000. Prior to the change in legislation, George would have received £600,000, with the remaining £150,000 going to his parents.
However, since the legislation has been updated this has changed and in the example above George would receive the whole £750,000.
Married Couples/civil partners with children
Historically, a surviving spouse or civil partner would inherit the first £250,000 amount of the estate and then have a life interest (right to receive income)in any amount over the first £250,000, the capital would be held for the children . However, the new legislation has removed the concept of ‘life interest, resulting in the surviving spouse or civil partner still receiving the first £250,000 but in addition, half the value, absolutely, over this amount. The remaining value is held for the children.
The new legislation, has not addressed the concept of unmarried partners still treating anyone in this situation as single. The anomaly of this situation is best illustrated in an example. Jules and Robert are partners of 10 years, both their parents died many years ago, unfortunately Robert dies unexpectedly without a Will. Jules will not inherit any of Robert’s estate. Instead Roberts’s sister, who Robert did not speak to will inherit.
While the intestacy rules have been updated, clients should not rely on them for passing their assets on to loved ones. Doing so can still lead to uncertainty and an unwanted outcome. Therefore, clients should be advised to make a Will, to ensure they have control on who should benefit in the event of death.
Definition of Chattels
This has been updated to mean tangible moveable property other than property which consists of money or securities for money; was used by the deceased solely or mainly for business purposes or was held at the death of the intestate solely as an investment.
This article highlights some of the key changes but is not exhaustive.