The Inheritance and Trustees’ Powers Act 2014 came into force on 01 October 2014.

It makes important changes to the rights of families and dependants of a deceased person.

 Changes to the intestacy rules:

  • When a person dies without leaving a Will (‘intestate’) the distribution of his estate among family members is determined by a set of legal rules, known as the ‘intestacy rules’.

The main changes to these rules (applicable to deaths on or after 01 October 2014) include:

  • Where a couple are married or in a civil partnership and there are no children (or remoter descendants) the surviving spouse or civil partner will inherit the whole estate on intestacy. Previously, the deceased’s parents or siblings might also have inherited a share of the estate.
  • Where the deceased leaves children (or remoter descendants) the surviving spouse or civil partner will inherit
  • Personal chattels
  • A ‘fixed net sum’ (currently £250,000) and
  • Half of the remaining estate (‘residue’) outright
  • The children will inherit the remaining half share of residue (held on trust until they are 18).

This simplifies the system, as previously the spouse’s half share of residue would have been held on trust for life, then ultimately for the children. However, it also means that the children’s overall entitlement is reduced.

  • The ‘fixed net sum’ will be updated on a regular basis to take account of inflation
  • Children who are adopted after the death of a parent will qualify as ‘children’ of the deceased for the purposes of inheriting under the intestacy rules. This applies to adoptions on or after 01 October 2014.

Law Commission proposals that the intestacy rules should be revised to include cohabitants were not implemented. The position remains that a co-habiting partner, of however long standing, has no automatic legal entitlement to a share of their partner’s assets on death, in the absence of a Will.

We recommend that everyone should make a Will, rather than rely on the application of the intestacy rules and for couples who are not married or in a civil partnership it is vitally important that they make Wills, if they wish to benefit each other on death. 

Changes to Family Provision claims:

Whether or not the deceased left a Will, certain family members and dependants can apply to Court to claim reasonable financial provision from the estate, under the Inheritance (Provision for Family and Dependants) Act 1975.

Changes to this Act include:

  • A child can now make a claim on the basis of being treated as a ‘child of the family’ where the deceased was not married or in a civil partnership.
  • It will be easier for a dependant to bring a claim on the basis that they were maintained by the deceased.

These changes may lead to an increase in the number of ‘family provision’ claims.

For more advice on this matter please contact Caroline Sturge on 01483 302000 or e-mail caroline.sturge@rhw.co.uk

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.