All Change - No need for a will?

Here is a summary of changes to the intestacy rules being introduced by the Inheritance & Trustees Powers Act 2014 which come into force on 1 October:

1. Surviving spouse(SS)/Civil Partner (CP) will inherit the entire estate where there are no issue.

2. Where there are issue the SS/CP will get personal chattels and a statutory legacy (£250K) as before, but now 50% of the balance of the estate will also pass outright to the SS/CP. The other 50% is shared by children or other descendants. There will no longer be any life interest for the SS.

3. There is an updated definition of personal chattels replacing the 1925 definition and references to horses stables etc. In essence the definition now covers all tangible movable property excluding cash and excluding property either mainly used for business purposes or held solely as an investment.

4. Amendment to IPFDA 1975 making it easier for co-habitants to claim reasonable provision from the estate where they were being maintained by the deceased immediately prior to death. It removes the previous ‘balance sheet test’ which required the applicant to show that the deceased made a greater financial contribution to the relationship than the applicant.

Fitzhugh Gates Solicitors Comment

The rules on who inherits from you if you do not leave a Will changed on 1 October 2014.

Most lawyers think the new rules represent an improvement. We at Fitzhugh Gates agree, primarily because they makes better provision for your surviving spouse or civil partner (CP).

However, Chris Thomas, a partner in our private client department provides a few reasons why it is still unwise for spouses/CP’s to leave things to chance:

• The rules may “over egg the pudding” for surviving spouses and CP’s. They might look good for those in a first marriage/CP but they are much less likely to suit those in second relationships.
• Where you want to balance provision for your surviving spouse/CP with ultimately providing for your children there is no substitute for a professionally drafted Will. If anything the need for a Will is greater following these changes.
• It is still important to address what is to happen if you both died. Not least if you have young children it is essential that you choose who will bring them up by appointing guardians.

Charities may also be concerned if the changes mean less people make Wills because a Will presents an ideal opportunity to make a charitable gift that perhaps you feel you could not afford to make during your lifetime. See www.rememberacharity.org.uk for details about charitable giving in your Will.

The new rules are best suited to simple first relationships, but they have come in at a time when our experience suggests family relationships are becoming more complicated with low levels of marriage, high levels of breakdown and more second families and step relationships.

Despite obvious good intentions, ask yourself this: Do I really trust the state to decide who should inherit from me? If the answer is ‘no’ you need an up-to-date Will.

By Christopher Thomas - Partner