The Inheritance and Trustees’ Power Bill received Royal Assent on 14 May 2014, becoming the Inheritance and Trustees’ Power Act 2014 (“the Act”). The changes are due to come into force in October 2014.
The Act, among other things, makes changes to the rules that apply where someone dies without leaving a will. These changes are as follows:
1. Where a person dies leaving a spouse (including civil partners) and children, the spouse receives £250,000, all of the deceased’s chattels (see below) and half of the rest of the estate. The other half passes to the children at the age of 18.
2. Where someone dies leaving a spouse but no children or grandchildren, the spouse takes the entire estate.
Before these changes come into force, the existing provisions will apply. For scenario 1 above, this means that the surviving spouse receives a life interest in the half of the residue of the estate rather than receiving it outright. For scenario 2, the current provisions are that the surviving spouse receives £450,000, all of the deceased’s chattels and half of the rest of the estate. The other half passes to the deceased’s parents or siblings.
The definition of what ‘chattels’ are has also been updated by the Act and now covers all tangible movable property except for property:
• Consisting of money or securities for money;
• Used at death solely or mainly for business purposes; or
• Held at death solely as an investment.
The changes outlined above to the intestacy rules will therefore be of some benefit to surviving spouses where the first to die has left no will. However, even the revised provisions are still rarely going reflect what someone would want to provide in their will if they had made one.
It is still therefore strongly advisable, as a basic part of estate planning, to make a will and take the opportunity to consider how your assets should pass on your death, who your executors should be and, if appropriate, who should act as guardians for your children.
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