Intestacy rules changes from 1 October 2014
From 1 October 2014, under the Inheritance and Trustees Powers Act 2014 (the Act), the intestacy rules have changed.
Although surviving spouses are in a stronger position than before, the same cannot be said for surviving siblings, cousins, parents and indeed children of wealthy families. Automatic rights do not come into fruition as before and surviving children have to contend with monies being held on statutory trust as opposed to it being distributed immediately.
Additionally, for those unmarried or cohabiting couples, the surviving spouse is still not entitled to a proportion of the estate, which merely serves to emphasise the need for having a will in place.
Further, for deaths on or after 1 October 2014, all estates subject to the intestacy rules will be subject to these new provisions. The key changes of the new Act include:
- where a couple (including same-sex spouses and civil partners) is married and there are no children, the surviving spouse will receive all the assets passing on intestacy as opposed to being limited to the statutory legacy cap of £450,000 that previously existed. This of course is subject to the estate being worth this much; and
- where a couple (including same-sex spouses and civil partners) is married and there are children, the surviving spouse takes the statutory legacy of the first £250,000 of the estate (subject again of course to the estate being worth this much), as was the case before. However now in addition, the surviving spouse would also take half of any balance of the estate outright which will no longer automatically revert to the children upon their death. The surviving children will then take the remaining half on statutory trust, as opposed to immediately.
If you have any queries on this topic please contact our Private Client department.