The English Inheritance and Trustees’ Powers Act 2014 received Royal Assent on 24 May 2014 and is expected to come into force on 1 October 2014. The changes brought in by this Act may affect anyone with immovable assets (i.e. real estate) in England and Wales. As a general rule, the law of the place where the real estate is governs how that property is dealt with on someone’s death (rather than, for example, that person’s domicile).
The main changes are to the intestacy provisions i.e. the rules which apply if someone dies without a Will or valid foreign Will. The changes highlight the importance of having a Will in place and ensuring that any Will made is valid in any country in which you have assets (and, in particular, immovable assets).
A foreign Will is considered valid in England and Wales if it complies with the law of the country where:
- The testator was domiciled at the time the Will was executed or at his death;
- The testator was habitually resident at the time the Will was executed or at his death; or
- The testator was a national at the time the Will was executed or at his death.
If there is no such valid Will, the following changes to the intestacy provisions brought in by this Act are of particular relevance:
- If an intestate person dies leaving a spouse or civil partner, but no issue (ie children or grandchildren) their estate will pass to their partner absolutely. Parents and siblings no longer have any rights to estates worth more than £450,000.
- If an intestate person dies leaving a spouse or civil partner and issue, the surviving spouse or civil partner will continue to receive ‘personal chattels’ and statutory legacy of £250,000. However, rather than obtaining a life interest in the remaining half of the residual estate held on trust for the issue of the intestate, they will now receive this absolutely.
The reforms also permit a claim for financial provision in certain circumstances where the deceased died domiciled outside of England and Wales, but left property and family members or dependants in England and Wales.