Inheritance and Trustees’ Powers Act 2014 and its impact on intestacy law

In most of the cases we undertake, the scope of our research is determined by fairly old legislation pertaining to the inheritance of estates: The Administration of Estates Act 1925 and the Intestates’ Estates Act 1952. Changes in twentieth century society were later reflected in the Family Law Reform Acts of 1969 and 1987, the latter, for example, furthering the rights of ‘illegitimate’ children to inherit an estate.

So, the fundamentals of intestacy legislation were decided in a very different era from our own (before all women had the vote!) and reviews are occasionally undertaken, the most recent being the Law Commission of December 2011. This commission formed the basis of the Inheritance and Trustee Powers Act, which became law in October 2014. Civil Partnerships, for example, are a relatively recent development and their status is reflected in the Act.

What does intestacy mean?

A person has died intestate if they have not left a valid will – this still applies to the majority of the population. This could mean that no will was written at all or that the will was not properly executed, for example if the will was not properly witnessed or no executor was named. It may also be the case where a will was properly executed but was invalidated by a subsequent marriage or divorce. We also regularly deal with cases of partial intestacy, where the deceased left a will which did not dispose of all of their estate. For example, a residuary beneficiary may have died or part of the estate was left to a charity or an organisation which no longer exists. In such cases, the rules of intestate succession apply to the residuary amount.

How have the Rules of Intestacy 2014 changed?

Under the Rules of Intestacy 2014 Act, if the deceased had no children, the estate would pass to their spouse or civil partner in full. Prior to the act, spouses and civil partners were entitled to a statutory legacy of £450,000 and the rest would go to the deceased’s parents (or siblings, if the parents were deceased). Where there are children, the surviving spouse or civil partner is still entitled to the first £250,000 as before, although this amount is now index linked, so would rise accordingly in future. The change with the Act is that the spouse/civil partner is now entitled to half of the residuary estate above the first £250,000 instead of only taking a life interest in half, as was the case before. This change obviously benefits the spouse/civil partner over any children, which might be considered fair but can become a source of contention, particularly in situations where the deceased’s children are from a previous marriage.

Most of our cases do not involve a surviving spouse or children (or at least none that are known to the administrating solicitor…). However, even where the entitled class of kin is distant, it is important to consider how the changes in the 2014 Act affects other previous legislation, especially the Inheritance (Provision for Family and Dependants) Act (1975), which permits certain family members and dependants to apply to the court to vary the distribution of a deceased person’s property.

Who inherits when a person dies intestate?

If somebody has died without leaving a valid will, the law of intestate succession gives priority to a surviving spouse or civil partner of the deceased, followed by blood relatives (children and their descendants, parents, siblings and their descendants, grandparents, aunts and uncles and their descendants). Half-blood siblings and aunts/uncles are considered if there are no relatives of the full-blood in that class of kin.

Professionals in the field of private client law, including probate, trusts and estate administration, are of course well aware of the pitfalls of an intestate estate. It may sound like turkeys voting for Christmas from a firm specialising in resolving intestacies but the simplest way to avoid these problems arising for loved ones after your death is to make a valid will, with the advice of an expert solicitor. However, as we know, most people still do not make a will.

Our three directors have put their heads together, pooling their collective seventy-two years of knowledge and experience as professional genealogists, to give you our top ten tips for estate administrators dealing with an intestacy.