FEDERATION Changes to intestacy rules T
he importance of making a will has been highlighted by changes to the intestacy rules which came into force
on 1 October 2014. These changes marginally improve the position for married couples and civil partners but still provide no protection at all for couples who have not married or entered into a civil partnership.
What is intestacy?
When a person dies without leaving a valid will, they are said to have died intestate and their assets must be distributed according to the rules of intestacy.
Under the current rules, if the deceased was married or in a recognised civil partnership and there were no children in the relationship, the first £450,000 from the deceased's estate, plus half of the rest, goes to the surviving spouse. The other half is split between the deceased's blood relatives including any surviving parents.
If there are children in the relationship,
the surviving spouse inherits only the first £250,000 from the deceased's estate, plus a 'life interest' in half of any remainder. The other half is split between the children, who inherit immediately at age 18. Life interest means that the surviving spouse could derive income from the money during their lifetime, but would not have access to the capital funds. The remaining capital amount would pass to the children upon the death of the spouse.
What's changing?
The single biggest change is to the rules affecting married couples and civil partners where there are no children. In the past, they received the first £450,000 from the estate with the rest getting split between the deceased's blood relatives. As from October 1st, the surviving spouse will receive everything and wider family members get nothing from the estate.
Changes will also affect couples who have children. Under the new rules, the life interest concept is to be abolished with the surviving married partner receiving the first £250,000 plus half of any remainder. The children will
Make a will
The intestacy rules, even with these new provisions, are still far from perfect. The changes only marginally improve the position for married couples and civil partners and couples who have not married or entered into a civil partnership effectively still have no rights to inherit anything at all.
This emphasises the importance of making a will to ensure that your wishes are followed. Every family is different so having a valid will in place is the only certain way to make sure those you want to provide for in the event of your death are looked after the way you want them to be.
Sarah Banner is an associate at national law firm Shoosmiths who specialises in wills and succession planning. She can help readers to draft or update a will and/or answer any questions you may have, you can contact her directly on 03700 868 332 or by email on
sarah.banner@
shoosmiths.co.uk
means having a will is even more important In our last edition, Sarah Banner shared an article around the importance of making a will. You’ll have also heard, in recent months, about intestacy – when a person dies without leaving a will. Here’s a breakdown for what these new changes may well mean for you, your partner or family.
receive half of anything above £250,000 and will have to wait until they are 18 before they can access any funds.
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