Inheritance Act Changes and What it Means For You
Intestacy rules are set for a huge change allowing more parties to receive something on the death of a close loved one who doesn't leave a Will behind.
Whilst it is best to have a Will to make sure your wishes are met, in some cases, these new intestacy rules will apply.
What Are the Changes?
The Inheritance and Trustees Powers Act 2014 will come into force today
. The Act makes significant changes to the intestacy rules, which govern what happens to a person's estate when they die without leaving a Will. Under the new rules when a person dies intestate leaving no children, their spouse or civil partner will inherit all of their estate
. This change removes the previous entitlement of parents and siblings.
The Act also removes the life interest which was previously created when the person died leaving a spouse or civil partner and children with an estate worth over £250,000 (this figure is subject to change). The spouse or civil partner is entitled to receive the first £250,000 of the estate and half of the remaining balance of the estate absolutely together with the 'personal chattels'
The Act updates and modernises the definition of personal chattels. The Administration of Estates Act 1925 definition of personal chattels included 'carriages, horses, stable furniture and effects, garden effects, domestic animals, plated articles, linen and china.' The Inheritance and Trustees Powers Act 2014 has simplified the definition to 'tangible moveable property'
this would include all of your personal belongings including electrical items. This does not include money, items used for business purposes or anything owned as an investment.
The new definition will only apply to Wills made from 1st October 2014
Some Still Miss Out
The Act also amends the powers given to Trustees under the Trustees Act 1925. Trustees now have more power to apply all of the income and capital for the maintenance of the beneficiary; they no longer have an obligation to retain half the capital for the beneficiary.
The Inheritance and Trustees Powers Act 2014 widens the category of people who can bring a claim against a deceased estate. Anyone treated like a child of the family where the deceased had a parental role even if the child is not legally a child of the deceased is entitled to make a claim against the estate.
The Act does not make provision for partners or cohabitees which is a common and popular way for people to live together.
People make a Will so they can leave their estate and belongings to who they wish
. One of the most common problems lawyers face is representing the cohabitees and life partners of people who have not left a Will. Often, they are left out in the cold with no right to entitlement because of a failure on their partner's behalf to make a Will
We would always advise people to make a Will
however, in situations where that hasn't happened, a change in the law is right and necessary.