The importance of making a Will
Not making a will can have a huge impact so you might be surprised to learn that more than 2/3 of the UK’s population have yet to complete this very important task.
If someone dies without making a valid will they are said to have died ‘Intestate’ and their estate is then ‘administered’ (distributed) according to the rules of ‘Intestacy’ rather than in the way they might have wished.
Prior to the introduction of the Inheritance and Trustees Powers Act 2014 (ITPA) if a person died intestate leaving a spouse/civil partner and ‘issue’ (children) they could receive a ‘statutory legacy’ of £250,000 and a ‘life interest’ (an entitlement to income) in half of the residuary estate (ie whatever was left) with the balance to be held on ‘trust’ for the issue. This means that where someone dies intestate leaving a substantial estate, the surviving spouse could be left with a very small proportion of the value of the estate some of which might be in the form of a ‘life interest’.
The ITPA has introduced some very important changes that help to protect a surviving spouse. Now, the surviving spouse will be entitled to a slightly more complicated version of the ‘statutory legacy’ and one half of the residuary estate outright. The balance of the residuary estate is again held on trust for any children.
The surviving spouse was also entitled to the deceased’s ‘personal chattels’ and the definition of a ‘personal chattel’ has been widened to ensure that the surviving spouse/civil partner receives almost everything that is not money, an investment or was used for the deceased’s business.
Whilst these changes and others will make a difference to the surviving spouse/civil partner who finds themselves in this situation, there can be no substitute for making a will and updating it regularly where appropriate. By doing so you will ensure that your estate is dealt with in the way that you want and, hopefully, unnecessary disputes and family disagreements can be avoided.
It should be noted that none of these changes apply to cohabitees who would have to fall back on the entitlement in some circumstance to apply to the court for ‘reasonable provision’ – a potentially long and costly exercise.
Making a will can give you peace of mind as you know that your wishes have been made clear.
Ian Oliver, partner.George Ide