What are the new Intestacy Rules and who do they affect?
Today, sees new rules come into force for the laws governing what happens to someone’s assets when they die without a Will (intestacy law) and who can make a claim against an estate.
One of the controversial parts of the new rules is around the modern family i.e. who receives what if you were co-habiting. Many professionals were pressing for those in unmarried relationships to receive a portion of their partner’s estate if they die without a Will.
At present, unmarried partners are legally entitled to nothing even if they share children or have cohabited for many years. The new laws do not change this. Die without a Will and your partner receives nothing. Their only recourse is to make a claim against your estate.
Having covered what is not changing, what actually does change?
One of the biggest changes is for married couples and civil partners without children. Under the old rules the survivor received the first £450,000 plus half the rest. The other half was split between blood relatives according to strict rules. Under the new rules the survivor receives everything.
For married couples and civil partners with children the theory of “life interest” is now eradicated. The new rules are significantly simpler, with the survivor entitled to the first £250,000 plus half the remainder. The children share the rest. Previously the spouse only got a life interest in half the remainder i.e. they received the income from their half but the capital was protected for the children.
Finally, one of the other significant changes is to the scope of people who are entitled to claim against your estate. As well as redefining who is classified as a dependant the new rules now recognise the ‘blended family’. For example, your partner’s child can now claim against your estate as if they were your child. Even if your partner died before you! Although, it’s worth mentioning that, this doesn’t automatically mean they will be successful if a claim is made.
The changes to the intestacy laws once again highlight the importance of making a Will. If you want to choose who inherits you need to have a Will. Furthermore make sure it’s up to date and relevant.
Above is just an overview of the main changes that will affect decisions when making a Will. There are other technical changes, including certain powers of Trustees, that we have not mentioned.
Please let us know if you or your clients require any further information.