Although there is generally an increasing entitlement for surviving spouses and civil partners, the changes to the intestacy rules are not as far reaching as originally proposed, and highlight the importance of making a Will.
As you may know, when an individual dies without leaving a valid Will, he is said to have died ‘intestate’. Rules known as the intestacy rules then apply, for example, because an invalid Will was made, the Will was revoked, the individual married or entered into a civil partnership after making a Will or the deceased simply didn’t get around to making a Will.
New reforms to the intestacy rules were introduced on 1 October 2014. A few points to note:
– Previously, with married couples and civil partnerships where there were no children, the survivor received the first £450,000 from the estate and the deceased’s other relatives could benefit. Now, the whole estate passes to the surviving spouse/ civil partner meaning wider family members do not receive anything.
– The sharing of assets on intestacy have been simplified where the deceased is survived by a spouse and children. Previously, the surviving spouse received the first £250,000 and a ‘life interest’ (access to income) in half of the remainder with the children having the other half. Now, the life interest has been abolished and the surviving spouse takes the personal possessions and receives the first £250,000 and half of any balance of the estate outright. The surviving children or other descendants take the remaining half share on trust until they are 18 when they receive it outright.
– The new provisions provide no protection for couples who have not married or have not entered into a civil partnership, thus the cohabitant of an intestate has no entitlement.
– Step- children still have no automatic right to inherit under the new reforms.
– The usual hazards of separating from your spouse means that making/ amending your Will is just as essential now as it was before these new rules came in.
– Further, the general principle is that the estate is shared by the relatives in the highest category, to the exclusion of relatives in lower categories.
What is clear is that without a Will, the situation is far more complicated and it may cost significantly more to resolve disputes and the effect of the rules is that beneficiaries inherit part or all of the estate who would otherwise have not benefited had a Will been made. The intestacy rules don’t necessarily mean that the people you would like to benefit from your estate will do. You could have lived with someone for 20 years, yet without being married or in a civil partnership, this person may not benefit. Children automatically inheriting assets at the age of 18 is often not preferred as they may not be mature enough to sensibly manage their inheritance.
If you still need to prepare your Will, or wish to review your existing Will, to ensure your wishes are followed when you pass away, please let us know.