Will you or won’t you be caught out by new law
A big shake up of what happens if you die without a Will comes into force on October 1st. If you die without a will ‘common law’ partners may be shocked to realise they still have no rights to inherit and the children of married couples are in line for less than they thought. However the rights of a wife or civil partner are simplified.
Laws of Intestacy
The laws of Intestacy state that if someone dies without a valid Will in place the law distributes the deceased person’s estate between any surviving spouse, children or relatives.
Research indicates that up to two thirds of adults do not have a Will and thousands of people die intestate every year. Lawyers have said for some time it is essential that the legal rules governing the distribution of an estate should “reflect the needs and expectations of modern families”, however the rules for co-habitants are not changed.
What happens to a couple living together?
"There is currently a popular myth that the "common-law" spouse is afforded legal rights - this simply isn't the case, even though it does reflect the way that many people are choosing to live their lives.” said Partner, Daniel Prince.
“Before the changes the entire estate of an unmarried couple with no children would go to the blood relatives of the deceased, the partner gets nothing and this does not change after October 1st. The only way to ensure your partner inherits is to make sure you have a Will,” he added.
“That person may then have to issue a claim against the estate for reasonable financial provision, which unfortunately involves court proceedings and the subsequent expense.”
The biggest change made by the Inheritance and Trustees’ Powers Act 2014, includes the passing of the whole estate to the surviving spouse/civil partner if there are no children. Previously a parent or other relative would have inherited some if the estate was over £450,000.
- If the husband died previously with a £750,000 estate the wife would get £450,000 plus 50% of the remaining estate, the blood relatives of the deceased would get the remainder, in this case £150,000.From October 1st the wife will received the whole £750,000.
Children and Inheritance
Similarly there are some important changes to what children inherit from a married/civil partnership couple. Previously they would have half the balance above £250,000 immediately (or in trust if under 18) and have access to the other half at some time in the future, with the surviving spouse having ‘life interest’ in it, but not the capital. From October 1st life interest is abolished, the married partner takes the first £250,000 half of the remainder and the remaining half passing to the children, which in many cases will significantly reduce the inheritance of children.
“As always I would reiterate that the only way to make sure your wishes regarding your estate are followed after you death is to make a Will,” said Mr Prince.
These reforms also include changes to inheritance by children who lose a parent and are subsequently adopted and are also intended to assist unmarried fathers who lose out under current laws if their child dies intestate.
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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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