Inheritance And Trustees’ Powers Bill – Changes To The Intestacy Rules

The Inheritance and Trustees' Powers Bill, which makes significant amendments to the intestacy rules, recently had its first reading in the House of Lords. Read on to find out more about these changes....

The Inheritance and Trustees' Powers Bill ("the Bill") is currently working its way through the House of Lords, with a second committee stage reading due to take place on 22 October. The Bill proposes a wide range of amendments to a number of different inheritance and succession law issues although this article concentrates on reform of the intestacy rules, an area of law which has not had a comprehensive review for over 20 years. Essentially, the main objective of the Bill is to simplify the distribution of an estate when a person dies without making a Will (intestate).

The principal change under the Bill relates to the entitlement of a surviving spouse (or civil partner) of the person who has died intestate in two situations. First, where the deceased is survived by issue (i.e. direct descendants of the deceased including children, grandchildren, great-grandchildren etc.) and secondly, where the deceased was not survived by issue but was survived by at least one parent or at least one full sibling (although there are other categories of relatives who rank lower in the order of priority under the intestacy rules such as nieces, nephews, grandparents, aunts and uncles).

The intestacy rules state that where the deceased dies leaving issue, the surviving spouse is entitled to the deceased's personal effects and a statutory legacy (currently £250,000). In addition the existing rules provide that in such circumstances the surviving spouse is entitled to a life interest...