Whether you have made a will or not, recent changes to the inheritance rules could affect whether your assets are distributed in the way you would like.
Shelly Wainwright, from Ansons Solicitors wills and probate team, outlines the key changes introduced by the Inheritance and Trustees’ Powers Act 2014, which came into force on 1 October 2014, and how they could affect you:
If you have not yet made a will, the intestacy rules will dictate how your estate is distributed between your relatives when you die. The rules have now been changed, giving away more of your estate to your spouse and potentially depriving your children and other relatives of their inheritance.
Under the old rules, if you died intestate without any children, your estate was shared between your spouse and other blood relatives such as your parents and siblings. Under the new rules, the whole of your estate will pass to your spouse, leaving your parents and siblings with nothing.
The biggest shake up of the rules governs what happens if you are married and have children. Your spouse will now get all your personal belongings, the first £250,000 of your estate and half of the rest outright. Your children will only be left with the other half of the remainder. This could leave your children financially vulnerable especially if it is a second marriage, or where there are children from a previous relationship.
A modernised definition of personal chattels has now been introduced to cover all tangible movable property except for property, money or securities for money used for business purposes or held solely as an investment.
The rules that disadvantaged unmarried fathers when a child dies without a will, have also been amended. Previously there was a presumption that when a person whose parents were not married to one another died intestate, they were not survived by their father or anyone related to his father. From 1 October this will not apply if there is a father or another parents name on the child’s birth certificate. This also allows for same-sex parents to inherit equally from their children if both names are recorded on the birth certificate.
Further, children adopted after their parent’s death are protected from losing inheritance from that parent. This will mean a child who already has a contingent interest in the estate when he is adopted, shall maintain that interest.
Anyone who feels they have been unfairly left out of your will, or not provided for under the intestacy rules, can make claim under the Inheritance (Provision for Family and Dependants) Act 1975. They have to show that you maintained them financially when you were alive, but failed to make provision for them for after you were gone.
From 1 October, a person may be considered to have been maintained by you if they can show that you contributed substantially to that person’s reasonable needs. Formerly, a person had to show that you contributed more to their finances than they did. This will remove some of the obstacles to making claims and could see more intestacy claims and challenges to wills.
In the past, trustees responsible for looking after the inheritance of children have had to be guided by a reasonableness test when determining the income they allow. This has now been changed so that trustees can give any amount of income they see fit for the maintenance, education or benefit of a minor beneficiary.
The trustees’ power to give a capital advance has also been extended to the whole of a beneficiary’s prospective interest in capital, rather than only half of it.
These changes only apply to trusts and will trusts that arise on or after 1 October 2014.
If you have not made a will, or updated it recently, then contact us for a review of your circumstances and legal advice. Making a will and keeping it updated is the only way to make sure that your loved ones are provided for and your wishes are followed.
For further information, please contact Shelly Wainwright in the wills and probate team, on 01543 267¬ 984 or email email@example.com. Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.