Following the announcement on the changes to pension death benefits has come plans to revamp the intestacy laws in England and Wales.
The proposed changes once again highlight the importance of letting people know how you intend for your death benefits to be distributed. Make sure wills and pension death benefit instructions are in place and regularly reviewed.
The intestacy rules determine how a deceased’s estate is divided if they don’t have a valid will. And how certain investments are set up can dictate how they are passed on.
It is only married couples and civil partners who will see any benefit from the intestacy changes. There are still no statutory rules that would give the growing number of cohabiting couples a right to a deceased loved one’s estate.
The purpose of the changes is to simplify and improve the rights of married couples and civil partners, both with and without children.
From 1st October 2014, if someone dies intestate with no children, the estate will be inherited entirely by the surviving spouse or civil partner. Before the changes, a share of the estate could have gone to parents or siblings – leaving less for the spouse or civil partner.
The position for those with children has also been simplified. If someone dies intestate and leaves a spouse/civil partner and children, the spouse/civil partner will inherit three elements from the estate:
- All “personal chattels” i.e. moveable property such as jewellery, furniture and cars.
- £250,000 (or the whole of the estate, if its value is less than this).
- One half of any balance left over.
The new intestacy rules are seen as a ‘fall back provision’, which will give improved results for some. However, it is always advisable to control exactly who gets what by making a will and keeping it reviewed.
It is the same for pension death benefits. It is always advisable to ensure that death benefit instructions continue to reflect a client’s wishes.
If you need to talk over intestacy , or want to make a will, then please contact our Legal Solutions department, tel: 01226 208600.