Changes to the intestacy rules for spouses and civil partners by Mary Collyer
Changes to the intestacy rules for spouses and civil partners
If you die without a valid will, you are said to die ‘intestate’ and the intestacy rules determine who inherits your estate. On 1 October 2014, the Inheritance and Trustees' Powers Act 2014 came into force and made various changes to the intestacy rules. The main changes affect your spouse or civil partner if you die intestate on or after 1 October 2014.
If you are married or in a civil partnership but don’t have any children
Previously, if your estate was worth more than £450,000, the first £450,000 would go to your spouse or civil partner. However, assets above that sum had to be shared with your closest surviving relatives. Under the amended intestacy rules, all of your estate will now go to your spouse or civil partner.
If you are married or in a civil partnership and have children
If you die leaving children, it remains the case that the first £250,000 of your estate goes to your spouse or civil partner and the rest of your estate (known as the ‘residue’) has to be shared equally between your spouse or civil partner and your children. Under the old law, the surviving spouse or civil partner was only entitled to the income generated by their half of the residue for the rest of their life. From 1 October 2104, the surviving spouse will receive their half share outright.
The fixed sum of £250,000 that the spouse or civil partner is entitled to receive is known as the ‘statutory legacy’. It has not increased in amount but under the new law it will be index-linked and regularly reviewed. Interest is also payable on the statutory legacy at the Bank of England rate from the date of death to when it is actually paid.
What about unmarried partners?
The position regarding unmarried partners has not changed under the amended intestacy rules. Regardless of how long you have been together, if you are not married to your partner or in a civil partnership, in most cases none of your estate goes to them on your death.
New inheritance rights for fathers
The Inheritance and Trustees’ Powers Act 2014 also makes changes affecting fathers. Under the old law, if a child died intestate and his parents were not married at the time of his or her birth, the child’s estate was distributed as if the child’s father and his family had died before the child. This rule does not now apply if the child’s father’s name is on the child’s birth certificate.
Do I need to make a will?
While the changes to the intestacy rules are to be welcomed, for many people the intestacy rules still won’t achieve the outcome they would like on their death. To ensure your estate goes to the people you wish to benefit, it is essential you make a will. For further information, contact Mary Collyer on 0118 958 5611 or email email@example.com
Mary Collyer, October 2014