Changes to Intestacy Law
Posted 30/09/2014
Inheritance and Trustees’ Powers Act 2014
The Inheritance and Trustees Powers Act 2014 (ITPA) came into force on 1 October 2014. It makes significant changes to the intestacy rules, which apply to the administration and distribution of a person’s estate when they die without leaving a valid will.
Under ITPA:
If the deceased is survived by a spouse and children:
- the surviving spouse receives the first £250,000 and all personal goods.
- plus if the estate exceeds £250000, half of the estate passes absolutely to the surviving spouse and half of the remainder passes to the children.
If a spouse survives the deceased but does not leave any children:
- the entire estate passes to the surviving spouse
ITPA’s aim is to simplify the sharing of assets on intestacy. However, under the new rules children will now receive less of their parent’s estate and this may cause problems where there has been a second marriage or if a couple are separated but not divorced as the spouse will receive more than the children. If there is a spouse but no children, relatives such as parents and siblings will not benefit as they may have done before 1 October 2014.
ITPA does not give rights to unmarried cohabitees as common law husbands or wives are not recognised by law and they will still receive nothing if the deceased has not prepared a will.
ITPA also changes rules regarding claims against an estate, which will recognise more modern family structures. Where children are adopted after the death of their birth parents, they will no longer lose any potential claim against their parent’s estate and people who are “treated as a child of the family” are now able to make a claim. IPTA may also make it easier for cohabitants to make a claim as it implies that they will not have to show that the deceased contributed more financially than they did themselves.
It is more important than ever that individuals prepare a will rather than relying on ITPA. Making a will gives individuals control over who inherits their assets and avoids the emotional and financial problems, which can be left behind for loved ones to deal with when there is no will.
You need to consider:
- What happens if you and your spouse die together?
- What will happen if your spouse remarries after your death?
Unless you make a will you will have no control.
Please contact us for advice on making your will or for assistance in relation to estate administration.
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