Recent research indicates that up to two thirds of adults do not have a Will, and thousands of people die intestate every year. The Inheritance and Trustees’ Powers Act 2014, which received Royal Assent on 24 May 2014, is the result of a six year project by the Law Commission to address the issues arising from this. It is anticipated that the Act will come into force on 1 October 2014.
The Act implements a number of reforms to the current rules which apply when an individual dies intestate.
The keys changes are as follows:
- If an intestate dies leaving a spouse or civil partner but no issue (i.e. children or grandchildren) their estate will pass to that partner absolutely. This removes the rights of parents and siblings on intestacy in relation to estates worth more than £450,000.
- If an intestate dies leaving a spouse or civil partner and issue it is still the case that the spouse or civil partner receives ‘personal chattels’ absolutely, and the statutory legacy of £250,000.
However the residuary estate (i.e. anything remaining in the estate) will be treated differently under the new rules.
Whereas before the surviving spouse or civil partner would receive a life interest in one half of the residue, with the remaining half being held on the statutory trusts for the issue of the intestate, the surviving spouse or civil partner will now receive their half of the residue absolutely.
Inheritance (Provision for Family and Dependants) Act 1975
The Act also makes a number of amendments to the Inheritance (Provision for Family and Dependants) Act 1975 which allows close family and dependants of the deceased to bring a claim for provision from the estate where they have not been provided for.
The definition of who is entitled to bring a claim, as a person treated by the deceased as a child of the family, will be extended to include any person who was treated by the deceased as a child of the family, not only in relation to a marriage or civil partnership, but in relation to any family in which the deceased had a parental role.
There are also changes to the provisions which apply to an individual who is treated as being maintained by the deceased. Whereas the previous provisions provided that a person should be treated as being maintained by the deceased if the deceased was, otherwise than for full valuable consideration, making a substantial contribution towards that person’s reasonable needs, under the new provisions, the words “otherwise than for full valuable consideration” will be omitted. This avoids the previous situation where a claim might fail where the applicant was providing for the deceased in the context of an interdependent domestic relationship.