The Inheritance and Trustee Powers Act makes substantial changes to the rules of intestacy, the Inheritance (Provision for Family and Dependants) Act 1975, and trustees powers. Sadly, a good proportion of the population die with a Will in the UK, and in England and Wales that can be unfortunate for some of those left behind, and a disaster for couples who are no legally married or Civil Registered. Please remember that this is a laymans’ guide to the rules, with a link to the Government guide to who will inherit in these circumstances. That said, the Courts may have different ideas once the individual claims have been examined at vast expense if anyone makes a claim under the 1975 Act.
The Rules of Intestacy (no valid Last Will.)
When a person dies “intestate”, that is without leaving a valid will disposing of all of his or her property, the distribution of the deceased’s estate among surviving family members is governed by a set of legal rules. Bear in mind that a person can leave a valid Last Will which does not deal with the whole of his or her estate so a person can be partly “intestate.”
Rules of Intestacy for Deaths before October 2014 Where a person died without a valid Last Will leaving a spouse or civil partner the intestate estate passes straight to the surviving spouse or civil partner as long as there children (or grandchildren, great-grandchildren to take a dead parents share) and as long as no parent, or full brother or sister or child of one.
Rules of Intestacy for Deaths from 1st October 2014
The surviving spouse or civil partner inherits everything on intestacy where there are no issue (children, grandchildren etc.)
The new Inheritance and Trustees Powers Act also simplifies the sharing of assets where there is no valid Last Will covering all relevant assets if the deceased is survived by a spouse or civil partner and children or grandchildren. As long as there are no challenges under the 1975 Act abive,
Rules of Intestacy for Deaths before October 2014. The surviving spouse or civil partner is entitled to the personal chattels and the first £250,000, and a life interest in half of the balance which would then pass to the children (etc) on subsequent death. The rest is held for the children on statutory trusts until they reach the age of 18.
Rules of Intestacy for Deaths from 1st October 2014
The surviving spouse or civil partner is entitled to the personal chattels and the first £250,000. Then they received half of the balance of the estate absolutely. The rest still goes to the children on statutory trusts until they are 18. The difference in the new rules is that the surviving spouse owns their share absolutely, rather than only having a right to the income which is much more restrictive.
The surviving spouse or civil partner gets to all of the ‘personal chattels’. The new Act does not change this but it changes the definition of personal chattels.
Check out in more detail here.
New Inheritance Rights For Parents named on the Birth Certificate.
The Act is also making changes that will affect unmarried parents.
Before October 2014, where a child whose parents are unmarried dies, the child’s estate is distributed as if the child’s father and his family died before the child – so that the mother would be the sole beneficiary.
As a result of the Act, this rule will not apply if the child’s other parents name appears on the birth certificate – so that the child’s estate would be divided between the parents named on the birth certificate. This would include same-sex parents.
The new definition of personal chattels.
It expands on the current definition and includes all tangible movable property but it does not include assets which –
- Consisted of money or securities for money (this is not a change).
- Were used at the time of death solely or mainly for business purposes (not new, but there is a change of emphasis with words ‘solely or mainly’).
- At the death if the asset was solely an investment (this is wholly new). Property which had some personal use but which the deceased also hoped might maintain or increase in value, such as jewellery worn only occasionally will not fall within this exception.
The following table is a comparison of the rules before and after the changes introduced by the Inheritance and Trustees Powers Act 2014 for married and unmarried couples:
|Before 1 October 2014||After 1 October 2014|
|Married/Civil Partners – With Children||The first £250,000 to spouse with half of the rest going to children and the remainder on death of spouse. While alive, the spouse keeps a ‘life interest’ in half the money above £250,000, which lets them spend the income, but not touch the capital.||The first £250,000 to spouse plus half of the rest. The remaining estate goes to children and the ‘life interest’ rule disappears.|
|Married/Civil Partners – Without Children||The first £450,000 plus half of the rest goes to spouse. The remaining half goes to blood relatives.||Entire estate goes to spouse.|
|Unmarried Couple – With Children||Partner receives nothing. The person is treated as though they are single. The estate will be distributed to the children.||No change.|
|Unmarried Couple – Without Children||Partner receives nothing. The estate goes to blood relatives.||No change. There is currently no such thing as common law protection, regardless of how long the partners have lived together.|
In order to work out who should inherit, check out THIS PAGE on the Government website.