The Inheritance and Trustees’ Powers Act 2014 came into force on the 1st October 2014 and it makes substantial changes to the intestacy rules, the Inheritance (Provision for Family and Dependants) Act 1975 and Trustees’ powers.
The intestacy rules apply where a person dies without leaving a valid Will, or leaving a Will that fails to dispose of the whole of his or her property (a partial Intestacy).
Under the new rules the surviving spouse or civil partner will inherit the whole estate on intestacy in all cases where there are no issue (children, grandchildren, etc).
The new Act also simplifies the distribution of an estate on intestacy where the deceased is survived by both a spouse or civil partner and issue. The surviving spouse or civil partner will still receive the personal chattels and Statutory Legacy (currently £250,000). The balance of the estate is divided into two equal funds. One fund is held for the issue upon Statutory Trusts. The other fund passes to the surviving spouse or civil partner.
The definition of personal chattels has also been updated. The new definition defines personal chattels as;
“Tangible movable property other than any such property which consists of money or securities for money, or property used at the death of the intestate solely or mainly for business purposes, or is held at the death of the intestate solely as an investment”.
Extra care will now need to be taken when considering gifts of personal chattels, particularly where the chattels may add investment value.
Although the new rules are an improvement on the old rules, there is still no substitute for a properly considered and professionally drafted Will.