Posted on 29.9.14 by Val Bown
Too many people still die without making a will, and with increasingly complex family structures, children can often lose out, or become involved in unpleasant disputes with step-parents. The new intestacy rules which come into force on 1st October 2014 could disadvantage children of the deceased in any family, in favour of the surviving spouse. This makes it even more critical to have a valid will in place and to review it regularly to ensure that it still does what you want it to do.
If you die without a will you are “intestate”. Under the old rules, if you leave a spouse or civil partner, and children (or grandchildren) the surviving partner takes the first £250,000 of your assets. The remainder, if any is divided into two shares, one of which goes to the children immediately if they are over 18, and the other half is held on trust for the partner for their lifetime, so they receive income from investments or can live rent free in a property, but it passes to the children on their death.
Now the trust element of the procedure is to be eliminated, with this portion of the estate passing to the surviving partner outright. So the children will not benefit from it unless the partner makes a will in their favour.
If there are no children or grandchildren, the old rules provide that the surviving partner will receive the first £450,000 of the estate and anything over this amount passes to the deceased’s parents, or to siblings if the parents are no longer living. The new rules will provide that where there are no children, the partner will take the entire estate, no matter what its value, and other family members receive nothing.
Also, the new rules do not benefit any couples who are not married or in a civil partnership. Here the estate would pass to blood relatives and the surviving partner would need to make a claim against the estate which may or may not succeed depending on the circumstances and would in any event be very stressful at a difficult time.
We have seen numerous disputes arise out of intestacy situations, or from out of date wills which do not deal fairly with all interested parties at the time of death. This additional distress and expense can be avoided if you make sure your will is up to date and deals with any complexities in your family situation. The cost of making or updating a will is insignificant compared with the costs of a dispute once it’s too late.