Inheritance rules change
From 1st October a number of rules on inheritance have changed, following the adoption of the Inheritance and Trustees' Powers Act 2014.
What has changed?
The most significant change to come about, as a result of this Act, is that spouses will no longer automatically receive a life interest trust. Now, if your spouse has died without leaving a Will (intestate) and they have children you, as their spouse, will get statutory legacy (£250,000), the deceased's personal chattels and half the balance of the remaining estate outright. The children or other descendants will share the other half of the balance.
If your spouse has died without making a Will and they do not have children, you, as their spouse, will now inherit the whole estate.
These new rules apply even to estranged spouses or civil partners.
- A number of smaller changes have happened as a result of the Act.
Greater clarity and definition has been provided on what is meant by 'personal chattels'. This now means all tangible movable property except for money, securities for money, property used mainly for business purposes, or property held solely as an investment.
- The new act also frees trustees to apply income and capital with more discretion than the Trustee Act 1925.
What has not changed?
There have been small amendments to the Inheritance (Provision for Family and Dependants) Act 1975 to allow some cohabitants to make a provision claim. This is a claim against the estate to continue to provide financial maintenance, such as you received prior to their death. To make a claim you will no longer have to demonstrate that they contributed more to the relationship, in financial terms, than you did. You are also no longer required to prove that the deceased had formally assumed responsibility for your maintenance.
However, it is disappointing not to see changes, as proposed by the legal profession, that formally recognise long-term cohabitees and cohabitees with children. At this point the Act only formally, and in all situations, recognises those that are or have been married. This is yet another demonstration of the myth surrounding 'common law marriage'. To learn more about this you can read this blog post.
It is important that properly written and updated Wills are in place. In light of the changes to the Act, this is of particular significance to those cohabiting, who are currently unprotected should their partner die intestate. For more information please contact firstname.lastname@example.org, download more information or complete our online Wills form.