Make a Will and avoid the new Intestacy Rules
Making a Will is always a sensible step to take: none of us live for ever. It has become even more important since the Inheritance and Trustees Powers Act 2014 (ITPA 2014) came into force on 1 October 2014. The ITPA 2014 has introduced revised Intestacy Rules which govern the distribution of the estate of anyone who dies without having made a valid Will.
The revised Intestacy Rules applying to assets held in the sole name of the deceased person:
- If the deceased person was married or in a civil partnership at the date of death and leaves no children, the surviving spouse or civil partner is entitled to the entire estate, to the exclusion of all other blood relatives.
- If the deceased person was married or in a civil partnership at the date of death and leaves children, the surviving spouse or civil partner is entitled to:
- All of the deceased person’s personal chattels (now known as tangible movable property). This excludes cash and financial investments, and assets owned by the deceased and held for business purposes or as an investment.
- A statutory legacy (lump sum) of £250,000 (plus interest).
- If after payment of the statutory legacy there are any surplus funds then the surviving spouse or civil partner is entitled to a 50% share of the surplus funds.
- The remaining 50% share of the surplus funds is given to the children of the deceased person when they attain 18 years, and if more than one in equal shares.
The following points should be noted:
- The Intestacy Rules do not control assets held by the deceased person jointly with another person as Joint Tenants. Those assets will pass automatically to the surviving joint tenant.
- Assets held by the deceased person jointly with another person as Tenants in Common will not pass automatically to the surviving tenant in common. Instead those assets will pass in accordance with the deceased’s Will (if there is one) or in accordance with the Intestacy Rules.
- A surviving cohabitant (who is not married to or in a civil partnership with the deceased cohabitant) is not entitled to any part of the estate of the deceased cohabitant unless:
(a) the deceased cohabitant has made a valid Will benefiting the surviving cohabitant, or (b) the two cohabitants own assets as Joint Tenants.
Paul Solomons – Author
Paul leads the firm’s private client department and is able to offer his clients extensive knowledge and experience of all matters relating to Wills, Probate and Trusts, Inheritance Tax, Lasting Powers of Attorney and general elder client law.
Tel: 01202 802807