New intestacy rules in force on 1 October 2014

posted by AlisonHoy

The intestacy rules (which deal with the estate of a person who dies without a Will) have recently changed, but many people feel these changes do not go far enough.

What does intestacy mean?

When a person dies without leaving a valid Will, their assets must be distributed according to specific rules and a person who dies without a Will is said to have died intestate.

What has changed?

If a person who is married or in a civil partnership died before 1 October without leaving a Will and there were no children of that relationship, the first £450,000 of the estate plus half of the rest went to the surviving spouse or civil partner.  The  other half was split between the deceased’s blood relatives.

Under the new rules, the estate of anyone who dies without a Will who is in a marriage or civil partnership and there are no children, will now pass entirely to the surviving spouse or civil partner without any other relatives receiving anything. 

If the spouse or civil partner dies without a Will and there are children of that relationship, under the old rules the surviving spouse/partner would inherit £250,000 plus a life interest in half of the balance.  This meant that the surviving spouse was only entitled to the income produced by one half of the residue, the other half passing to the deceased’s children.

The change in the law means now that in these circumstances a surviving spouse or civil partner will still receive £250,000, but they will also  receive half of the balance absolutely rather than it being placed in a life interest trust. 

Chris Beames, head of the Private Client team at Berry Smith says:

“Despite these changes, which do increase the entitlement for surviving spouses and civil partners, they are not as far reaching as many people believe the law already is or should be. 

They do highlight again how important it is for everyone to make a Will to ensure that an individual’s wishes are carried out when they die.

The intestacy rules, while making matters somewhat better for spouses or civil partners, still state that any children of the relationship will inherit one half of the residue of the estate at 18, rather than at an age where many people think they would be more responsible e.g. 21 or 25.  By making a Will, these sorts of issues can be dealt with. 

I can only emphasise how important it is that family members have a valid Will drawn up, having taken professional advice. “

If you would like to discuss making a Will, please contact us at wills@berrysmith.com