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Intestacy changes from 1 October 2014

24th November 2014

The Inheritance and Trustees' Powers Act 2014 announced some key changes to the intestacy rules. This is the first time that the intestacy rules have changed since 1925 but broadly, as a result of these changes, a surviving spouse/civil partner will inherit a larger part of the estate than was previously the case.

The Inheritance and Trustees’ Powers Act [2014] amends section 46 of the Administration of Estates Act [1925] and is therefore only relevant in terms of the intestacy provisions for England & Wales.  The intestacy provisions for Scotland and Northern Ireland therefore currently remain unchanged.

The table below highlights the key changes and illustrates the position before and after 1 October 2014, with examples.

 

 Pre 1 October 2014

From 1 October 2014

Married/civil partner - No children (but surviving parents/siblings)

First £450,000 plus half of the residue goes to the spouse/civil partner absolutely. The remaining 50% goes absolutely to the blood relatives (parents, brothers and sisters etc).

Whole estate goes to the spouse/civil partner

Example

Husband dies leaving £600,000. Wife receives £525,000. The husband's mother has died, but his father is still alive. Father receives the remaining £75,000.

Husband dies, total estate £600,000.

Wife receives £600,000.
Husband's father receives nothing.

Married/civil partner – Children

First £250,000 goes to the spouse/civil partner, absolutely.

The residue is divided in two - half to the children absolutely and half held on a life interest trust for the spouse/civil partner. 

'Life interest' in half the money above £250,000 lets the spouse/civil partner spend the income, but not touch the capital.

When the spouse/civil partner dies, the children inherit the other half absolutely.

First £250,000 plus half of the residue to the spouse/civil partner absolutely (therefore no life interest trust). The other half goes to the children absolutely.

Example

Husband leaves £450,000. His wife receives £250,000. The remaining £200,000 ultimately goes to the children subject to half being held upon a life interest trust for the spouse/civil partner.

Husband leaves £450,000. His wife receives £250,000 plus £100,000 absolutely and children receive £100,000.
 

 'Personal chattels' will continue to pass to a surviving spouse/civil partner although the new Act amends and expands the statutory definition of personal chattels so that it now includes all tangible moveable property that is not used for business or investment purposes.

There are no changes to the rules for single people on death. This means that, for single people, the order of succession is:  

  • Children
  • Parents
  • Brothers and sisters
  • Nephews and nieces
  • Grandparents
  • Uncles and aunts
  • Cousins
  • The State 

There is no division of the estate between the above categories e.g. so if there are children, the estate is shared equally between them, but if there are no children the estate is shared equally between the parents, and so on.
   
If finding any relatives is difficult, the solicitor may place a notice in newspapers setting a date by which contact should be made, after which the estate would pass to the State.

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