No Will? New rules apply – your children may lose out
The rules of intestacy in England and Wales change this week, with the coming into force of the Inheritance and Trustees’ Powers Act 2014 on Wednesday 1 October.
This may mean that children of a parent who dies without a Will (intestate) may lose out from a greater share of the inheritance.
The intestacy rules dictate how someone’s estate is divided up where there is no valid Will and date back to 1925. The law stated that the surviving spouse or civil partner of an intestate with children will get a £250k statutory legacy, the deceased’s personal chattels and the balance the estate would be invested in a trust to provide income to the surviving spouse or civil partner and on their death, the capital sum would be paid to the children.
Now, the surviving spouse or civil partner still gets £250k and the deceased’s personal chattels BUT half the balance of the remaining estate is paid to the spouse or civil partner outright with the other half being paid to the children.
Erica Pearce-Howard, Associate Legal Practitioner at Crane & Staples says that “whilst the change was designed to simplify the system and provide faster access to the deceased’s estate, the result is that children will receive a much smaller proportion of the estate, or not at all if it is a second or subsequent marriage where there are step-children”.
Additionally, in cases where there are no children, previous legislation stated that relatives were entitled to a share in the estate after the spouse has received the first £450k.
From 1st October, the spouse or civil partner will become the sole beneficiary to the estate. This means that relatives such as parents, siblings and cousins will no longer benefit at all.
As around 40% of the adult population in Great Britain does not have a Will, the new rules could present issues to cohabiting couples and more complex situations where there are successive marriages and stepchildren.
In the case of cohabitation, if one unmarried partner dies without leaving a will their partner will still get nothing under the new rules but changes to the Inheritance (Provision for Family and Dependants) Act 1975 will make it easier for some cohabitants to make a reasonable provision claim under the 1975 Act.
Erica continues “whilst I am pleased to see an update to a law that is almost 90 years old, every person’s situation is unique and with so many diverse personal circumstances, it is even more vital for you to write a Will so that your estate is given to those that you wish to benefit rather than in accordance with legislation. It is extremely important that unmarried couples in particular have a valid Will in place to ensure their assets and personal belongings go to the people they are intended for.”
If you would like to discuss writing a Will or later life planning please contact either Erica Pearce-Howard (email@example.com) or Samantha Webb (firstname.lastname@example.org) or indeed visit us at the Howard Centre on Saturday 4th October where we will be more than happy to have an informal chat to see how we can help you.