The new rules of intestacy mean that if someone dies without making a will and does not have any children, their estate will be distributed to their surviving spouse or Civil Partner.

The Act also simplifies the distribution of assets where someone is survived by their children as well as by a spouse or Civil Partner. Under the old law, the surviving spouse or Civil Partner received personal chattels and a statutory legacy of up to £250,000 and a ‘life interest’ in half of the remaining estate, with the deceased’s children receiving the other half absolutely.

The new legislation keeps the provision on chattels, with a new definition of Tangible Movable Property and the statutory legacy. However, there is no longer a statutory life interest. Instead the spouse or civil partner will receive their half of the remaining estate outright.

Importance of making a will

The new rules apply even to estranged spouses or civil partners, which helps illustrate the importance of making a will to ensure an estate devolves in accordance with an individual’s wishes. Furthermore, where there is a second or third marriage, and individual may regard the new rules as too generous in respect of a spouse.

Potential benefit to cohabitants

The new rules also makes some modest amendments to the Inheritance (Provision for Family and Dependants) Act 1975. These amendments may make it easier for some cohabitants to make a reasonable provision claim under the 1975 Act. The new wording is obscure, but essentially implies that a claimant who was being maintained by the deceased immediately before their death will no longer have to show that the deceased contributed more to the relationship in financial terms than the applicant did. This will remove the ‘balance sheet test’ that can currently block claims in cases of mutual dependency, typically involving cohabitants. It also removes the requirement that the deceased had formally assumed responsibility for the claimant’s maintenance.

The new rules do not alter the 28 day survivorship rule in place since January 1996, whereby a surviving spouse inherits after a period of 28 days, nor the rule whereby in a fatal accident where the time of death is impossible to establish, the younger spouse is deemed to have died after the older spouse.

[Milford & Dormor Financial Planning Financial Planners does not give legal advice. The above comments are based on information provided by STEP and SOLLA and our understanding of the new law.]