Changes to the Intestacy Rules 2014: How will you be affected?
On 1st October 2014, new rules were introduced dealing with what happens to the estate of a person when they die intestate (without leaving a will) leaving more than £250,000. If you think this might apply to you or a loved one, read on to find out how the changes could affect you.
What are Intestacy Rules and What's Changing?
Intestacy rules govern the division of property and other assets in the event that a person dies without leaving a will. The rules are different depending on whether the person has a surviving spouse or civil partner or surviving children.
Before the new rules came into effect, if a person died intestate a portion of their estate would go to the surviving spouse (the first £450,000 plus half the remaining estate if there were no surviving children) and the rest would be shared between close relatives. If there were surviving children, the spouse would receive the first £250,000 and the rest would be divided between the children, with 50% of the remaining estate going straight to the children and 50% going to the surviving spouse on what was termed a 'life interest'.
The new rules abolish 'life interest' and give the first £250,000 plus half of any remaining estate to a surviving spouse with the rest going to the children. If there are no surviving children, the whole estate now goes to the surviving spouse, meaning parents or other relatives who might have expected to inherit some of the estate in the past receive nothing.
A further change ensures any adopted child who is subsequently re-adopted after their parent's death, still receives their share of any inheritance.
What about unmarried partners?
The rules haven't changed for partners who are not married or in a civil partnership. If their partner dies intestate, then the entire estate will be divided between blood relatives of the deceased and the deceased person's partner receives nothing, even if they have been living together for years or have children together. Therefore, people who are cohabiting still won't have any protection should their partner die intestate.
Whilst the new rules may be an attempt to simplify the intestacy process, they also underline the continuing importance of making a will and keeping it up to date, particularly if you are not married or in a civil partnership to ensure that your partner is protected and your wishes carried out after your death.
