Where There's A Will, There's A Way...
- AuthorJCP Solicitors
Does anybody like the thought of making a Will? It’s not an easy subject to broach and many of us will simply put it off until another day. Whilst there are rules in place, known as the intestacy rules, which will apply where there is no Will, this may mean that your estate does not pass to your loved ones in the way you would have chosen.
Preparing a Will which reflects your wishes has become increasingly important. This is because new intestacy rules were implemented on 1 October 2014.
The old rules provided that where there was a surviving spouse and issue (children, or if none survive you, grandchildren and so on), then the spouse received a legacy of £250,000.00 out of the estate. Whatever was left was split in half, with one half passing to the issue and the other half held on a Life Interest Trust for the spouse. This meant that although the monies in this part of the estate could be used to meet the needs of the surviving spouse by them receiving the income the funds generated, it safeguarded the capital to pass to the issue in equal shares on the surviving spouses death.
Under the new rules, although the spouse will still receive a legacy of £250,000.00 and the issue will receive half of whatever is left in equal shares, the other half will no longer be held on a Life Interest Trust for the spouse. It will instead, pass to the spouse absolutely. This means that ultimately, there is no safeguard over this part of the estate and it may therefore, be less likely that there will be anything left to pass to the children at the end of the surviving spouse’s days. This could be a particular problem where there are second marriages for example.
The position under the old rules differed where there was a surviving spouse, no issue but other surviving relatives. In these circumstances the spouse was entitled to a legacy of £450,000.00. Whatever is left was split in half, with one half passing to the spouse and the other half shared between the other surviving relatives, depending on who survived. The position is very different under the new rules, where the spouse will now receive everything in the estate and other surviving relatives will receive nothing.
What should we take away from this? It is important to recognise that the new intestacy rules appear to favour the surviving spouse more than the old rules. It is therefore crucial to prepare a Will if you want to ensure that part of your estate passes to other relatives, or if for example, you have a more complex family set-up, perhaps involving second marriages.