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New Rules on Intestacy

 

From the 1st October the Inheritance and Trustees’ Powers Act 2014 came into force and sets out new rules on intestacy.  The main beneficiary of the new rules is the surviving spouse/civil partner.  The table below highlights the key changes on intestacy.

Deceased dies leaving: Old rules New rules
A spouse/civil partner and children

Spouse/civil partner  receives

  • Statutory legacy of £250,000
  • Personal chattels
  • Life Interest in half of residue

 

Children entitled to remaining half of residuary estate at 18

Spouse/civil partner receives:

  • Statutory legacy of £250,000 (indexed linked)
  • Personal chattels
  • Entitled to half estate  outright
Children entitled to remaining half of residuary estate at 18
A spouse/civil partner but no children (parents and/or siblings survive)

Spouse/civil partner receives:

  • Statutory legacy of £450,000
  • Personal chattels
  • Half of residue

 

Parents receive half of residue equally (or siblings if no surviving parents) residuary estate

Spouse/civil partner receives the whole estate

 

 

 

 

Parents/siblings do not receive anything.

 

 

The new act leaves a larger portion of an estate to the surviving spouse or civil partner and removes the trust structure where there are surviving children. The new rules make some improvements and do simplify the rules but they do not remove the concerns of children from a previous marriage/civil partnership who will receive less from an estate or nothing at all.  We strongly advise making a will to remove all the uncertainty that remains.

The act also introduces a modernised statutory definition of personal chattels.  “Tangible movable property other than any such property which consists of money or securities for money, or property used at the death of the intestate solely or mainly for business purposes, or was held at the death of the intestate solely as an investment.” (Section 55(1)(x), AEA 1925 as amended by section 3, ITPA 2014).

 

ANNE CORDON

Head of Private Client at QSDavisons

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