Reform Of The Intestacy Rules And Family Provision Claims On Death

On 21 March 2013, the Government published draft legislation to reform the Intestacy Rules in England and Wales and rules relating to claims for family provision from a deceased person's estate. The draft Inheritance and Trustees' Powers Bill follows a lengthy period of consultation led by the Law Commission and their recommendations published on 14 December 2011.

Intestacy Rules

The Intestacy Rules apply where a person dies without leaving a valid Will disposing of the whole of his or her property. Under the Rules, there is a fixed order of priority for family members who can receive the deceased's property, specifying the share each is to receive (if any). The Intestacy Rules have not been comprehensively reviewed for over 20 years and have been much criticised for being out of date and not reflective of modern families' wishes and needs.

The Intestacy Rules can be overridden by making a Will and we would always advise our clients to make a Will rather than rely on the Intestacy Rules.

Under the current Intestacy Rules, where the deceased leaves a surviving spouse and children, the spouse receives the first £250,000 of the estate and one half of the remainder on a life interest trust. The children share the other half of the estate outright. The Rules were criticised for not allowing the surviving spouse full access to his or her half of the remainder of the estate as a life interest only entitles the beneficiary to income, not capital, and with no control over how the assets are managed.

Under the proposed reforms, the spouse will be entitled to their half of the remaining estate outright, meaning they can deal with the assets as they please.

The other reform in this area is to the interest the surviving spouse receives if the deceased dies without children. Currently, the spouse must share the remaining estate (after payment of a £450,000 legacy to the spouse) with the deceased's parents (if living) or full siblings (and their descendants). Under the proposed reforms, the spouse will receive the whole of the estate. This is regarded as fairer to the spouse and, in most cases, more likely to be what the deceased would have wanted, which is what the Intestacy Rules should seek to achieve.

Claims for Family Provision

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