Posted: 2nd October 2014
The Inheritance and Trustees’ Powers Bill has received Royal Assent and will come into force on 1st October 2014. The Bill will change how an estate is distributed if somebody dies without a Will (“intestate”). The two main changes are:
Increasing the amount which passes to the surviving spouse if there are no children –
Under the current rules if one spouse dies without a Will and there are no children, the survivor receives the first £450,000 of the estate absolutely together with half of the remainder and the deceased`s personal effects. The other half passes to members of the deceased`s family in a strict order of entitlement (parents first, then siblings followed by nieces and nephews). If there are no parents, siblings, nieces or nephews the entire estate passes to the surviving spouse.
The same rules apply to Civil Partners.
From the 1st October if there are no children of the marriage the entire estate will pass to the surviving spouse/civil partner.
Simplifying what happens where a spouse dies and the couple do have children –
Currently if the husband dies first, the widow receives the first £250,000 of the estate, the deceased`s personal belongings and a life interest (i.e. the right to the income but not the capital) in half the remainder. Under the new arrangements the surviving wife will receive half of the remainder absolutely instead of just a life interest. The remaining assets would belong to or be held on behalf of the deceased’s children depending on whether they were over 18 or not.
While the above changes are welcome having a properly drafted and updated will is by far the better option. Dying intestate still causes unnecessary expense and delays and it is important to consider what would happen if you and your spouse or partner both died at the same time.
You may also need to make a Will to appoint Guardians if you have children under the age of 18. Very importantly, unmarried couples are not covered by the new rules and will still receive nothing from their partner’s estate if they die intestate.
To make or update your will and to give you peace of mind contact our experienced and friendly Wills, Trusts and Probate team on email@example.com or 01603 620508.