If you die without having a valid will, a set of legal provisions known as the intestacy rules determine what will happen to your assets. These rules changed with the Inheritance and Trustees' Powers Act 2014 and, as a result, a surviving spouse (or civil partner) of someone dying without a will on or after 1 October 2014 will receive a larger proportion of the deceased's assets.
Previously, where a couple was married but the deceased left no children and there was no valid will, the surviving spouse received the first £450,000 of assets, personal belongings, and one half of the remaining assets. The other one half of the remaining assets went to the surviving blood relatives of the deceased. Now, the surviving spouse receives all assets on intestacy; any surviving parents, siblings, aunts and uncles or nieces and nephews will receive nothing.
If the married couple did have children, previously the surviving spouse would have received a ‘statutory legacy' of the first £250,000 together with personal belongings, and the remaining assets were divided equally between the spouse and the children (held on trust for any minor children until they reach 18). The surviving spouse only had a ‘life interest' in their 50% share of the remaining assets – meaning that they received the income but not the capital. The spouse will now simply receive all of their entitlement outright.
The surviving spouse will therefore be better provided for out of an intestate estate. However, the losers will be the deceased's children – this may cause particular problems if the deceased had children by a previous marriage, and this highlights why it is essential to have a will.
The statutory definition of personal chattels has also been amended. It now refers to all tangible movable property, except money or property used mainly for business purposes or solely as an investment. The new wording makes it clear that if you have an item which you use both for personal and business purposes, it will not be considered as one of your personal chattels if you used it primarily for business. If so, it will not pass automatically to your spouse on intestacy.
If you are not enjoying any personal use of a chattel, it will be viewed as held solely as an investment. This may catch some collections of art, wine, classic cars and so on if they are never actively enjoyed. In this case, they would no longer pass automatically to your spouse on an intestacy and would instead be shared with the children. If you have a collection, it is important to ensure that you have a will which specifies what is to happen to it in the event of your death so that all of your hard work in putting the collection together does not go to waste!
Despite all of these changes introduced by the new act, the new rules still do not make any provision for unmarried partners, even if they have been cohabiting for many years. The myth of the ‘common law spouse' is a pervasive one but still has no basis in law. As such, if you are cohabiting it is essential that you make a will to ensure that your partner benefits. Otherwise, they may be in the invidious position of having to bring a claim, if they are able to, as a dependant.
As with all discussions on the intestacy rules, the best advice is still to make a will and to review it periodically in light of your changing circumstances. Remember that a will will be revoked automatically on marriage unless specifically made in contemplation of marriage.