Intestacy rules reform on way

Changes to the way that assets are distributed when someone dies without making a will are due to come into force on 1 October this year.

When somebody dies intestate – without making a will – their estate, made up of money, property and other assets, is distributed among family members in line with strict intestacy rules.

These rules date back to 1925 and have not been comprehensively reviewed for more than 20 years but the Inheritance and Trustees’ Powers Act 2014 coming into force in October will make various changes. They include:

  • if someone dies leaving a spouse or civil partner but no children (or grandchildren), their whole estate will pass to their spouse or civil partner. Currently, parents or siblings receive a portion of estates worth more than £450,000
  • where someone dies leaving a spouse or civil partner and children (or grandchildren) their spouse or civil partner will receive a fixed sum of money and one half of any balance of the estate with the children receiving the rest of the estate. Under existing rules, the surviving spouse/civil partner receives only a fixed sum and a life interest in half the remaining estate, which means they can occupy property or receive any income produced by property and investments comprised within that half of the remaining estate, but not dispose of or receive that part of the estate
  • someone who was treated by the person who has died as a child of the family will be able to claim financial provision from their  estate. This applies to in relation to any family in which the deceased person had a parental role and not only to marriages or civil partnerships.

Lee McClellan, a partner in Palmers’ Wills, Trusts and Probate team, said: “Research repeatedly suggests that only around half of UK adults make a will, so the changes to intestacy laws will be relevant to many people.

“While the changes will help some and are welcome, it remains the case that the best way to ensure your assets go to the right people  is to make a will. This is particularly important in the case of cohabiting relationships, where a partner will receive nothing from an estate, under both the existing and new rules.

“Working with a legal adviser experienced in this field is a wise investment to avoid unnecessary stress and cost to loved ones following your death. For more information, please contact us.”