Tuesday, 10 June 2014

Intestacy - A Little less complex but you still need a Will

The Inheritance and Trustees’ Powers Bill has received Royal Assent and will come into force on 1st October 2014. While this might not sound exciting, there are two particular aspects which potentially could be seen as improving the rules for how an estate is distributed when a spouse dies without a Will (“intestate”).
Don't Leave a problem leave a willUnder current rules if a husband dies without a Will in place leaving no children, his wife would receive the first £450,000 of the estate. She would also receive half of the remainder and personal effects, with the other half passing to members of the husband’s family in a strict pecking order (parents first, then siblings and nieces and nephews). If there are no parents, siblings nieces or nephews alive, only then does the entire estate pass to the surviving spouse. The same rules apply to Civil Partners.
Under the new Bill, where there are no children the entire estate would pass to the surviving wife, which seems a rather more sensible approach.
The other change simplifies the situation where a spouse dies and the couple do have children. Currently, if for example the husband died first, the surviving wife receives the first £250,000 of the estate, personal belongings and a life interest (i.e. the right to income) in half the remainder. Under the new arrangements the surviving wife would receive half of the remainder absolutely instead of just the life interest. The remaining assets are held for the deceased’s children.
While the above changes are welcome, it is important to guard against complacency. Dying intestate still often causes enormous expense and delays, and you should also consider what would happen if you and your spouse or partner both died together.  You may also need to make a Will to appoint Guardians for children under 18, and to protect other assets. Very importantly, unmarried couples are not covered by the new rules, and still receive nothing form their partner’s estate if they die intestate.
So the advice remains the same, if you haven't written a Will you need to get it done today, there is no more important document, and the day you need it is always a day too late if you don't have it.
Call us 01778 382723 or email advice@will-probate.co.uk for more.