Know The Changes To The Intestacy Rules In England And Wales
Are you from England or Wales? You must have heard the term “bona vacantia” or ownerless good. The intestacy rules of the Administration of Estates Act 1925 depict what happens to a property or estate when someone in England dies without a will or naming an heir.
The rules have entitled married or civil partners, close relatives (including biological, adopted, and stepchildren in the presence or absence of married or civil partners), grandchildren, and great-grandchildren to make a claim.
In addition, the other close relatives, such as parents, brothers, sisters, grandparents, uncles, aunts, half-uncles/aunts, etc., are eligible according to intestacy rules.
When none of these eligible heirs is found, the estate or property goes to the crown. It is called “bona vacantia.” However, there have been recent updates in intestacy rules after the recent update on 26th July 2023. Are you familiar with them?
These are the Changes to Intestacy Rules: Know Who Inherits
On 26 July 2023, some changes to the intestacy rules in England and Wales came into effect, which have an impact on anyone who dies without a valid Will. Let’s explore what they are and what they might mean if you have not made a Will.
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Statutory Legacy
The statutory legacy is the amount of money that a surviving spouse or civil partner is entitled to receive if the deceased died intestate and with children. It is a fixed sum that is paid out before the remainder of the estate is divided between the surviving spouse or civil partner and the deceased’s children, and its primary purpose is to provide financial security.
Before 26 July 2023, the statutory legacy was £270,000 plus half the remaining estate; now, it has increased to £322,000 plus half of the remaining estate. The rise has meant that the administration of intestate estates is simpler and helps to ensure fewer families need to pay Inheritance Tax.
It is reviewed every five years to see if inflation increases by 15% or more from the base rate.
If the estate is worth less than £322,000, the spouse or civil partner inherits the entire estate.
Are you responsible for the administration of an intestate estate and are unsure how to properly distribute the deceased’s wealth? It may be worth speaking to a Kent accountant for probate services for help. Probate accountants are qualified to oversee estate administration and can advise on your obligations as well as help calculate the value of the estate.
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Inheritance Age For Children
The age at which children can inherit under the rules of intestacy has increased from 18 to 19. As such, their money remains in the Trust for an extra year.
If there is money in Trust for the children of an individual who has died intestate, administrators will need to seek advice on who the Trustees are and their duties. Again, a Kent tax advisor can help with this.
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Stepchildren And Half Siblings
Some clarification around the intestacy rules regarding stepchildren and half-siblings has been implemented. Stepchildren cannot inherit at all unless the deceased has legally adopted them. Half siblings of the deceased will only inherit if any of the following does not survive the deceased:
- Spouse or civil partner
- Children
- Parents
- Full siblings and their descendants
Why are Inheritance Disputes Becoming So Expensive? Learn Why Having A Proper Will is Important
Amidst the changes to the intestacy rules, a major concern regarding inheritance rises in England and Wales. To say the least, these legal disputes are becoming “more expensive” every day, making it more important to have a will in place.
Further, for many, fighting the intestacy cases for the rightful claims of the property is becoming emotionally draining.
Wills are Not Properly Drawn Up
If you are not aware of the practical scenario, 10,000 people in England and Wales deal with disputed wills every year. The baby boomer generation is leaving their property to their descendants, and their financial stakes are quite high.
Further, second marriages and disinheritance of stepchildren are the major concerns in these property disputes. Further, weird as it may sound, dementia is another reason for these will-related problems.
Many property-rich baby boomers are being forgetful about whom they want to include. So, often, they claim that the will has not been drawn properly.
These loopholes only make the litigation process lengthy. Naturally, the rounds of trials and paperwork are expensive. It seems like a part of the property is going to the lawyers and legal firms.
“I have never seen a will that says: ‘I would like to give a substantial part of my estate to litigation lawyers,’ but that does come to pass.” -A Probate at IBB Law.
“Families are becoming much more complex as standard. There are more second marriages, more cohabiting, blended families, and non-traditional relationships.” – Candy Stockton from Irwin Mitchell.
Family Members are Challenging The Validity of Wills
Well, family members can always challenge the validity of a will. So, imagine the perils one leaves for the descendants if there is no will with the complexity of intestacy rules involved.
Nevertheless, even after presenting a valid will before a court of law, many family members are challenging its justness. They are showing cognitive decline or dementia as the reason behind the problems with the wills.
Make a Note
Along with the intestacy rules to distribute the estate or property of a deceased person, there is also the 1975 Inheritance Act. The 1975 Inheritance Act is about “Provision for Family and Dependants.”
So, even if there is no will or any dispute regarding the will or complexities of intestacy rules, you can make a claim under this act.
Making a Will
The intestacy rules can be complex and, in some cases, even require the help of a genealogist. Making a Will is the best way to ensure that property distribution happens according to your wishes when you die. Accountants such as Nick Hughes can help with this.
They will help you value your estate and ensure your tax liabilities are minimal. Also, they will deal with any complexities, such as trusts, off-shore assets, or non-domiciliary status.
You’ll then be in a position to make a clear, valid Will. It will ensure the proper distribution of your wealth.
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Barsha Bhattacharya
Barsha Bhattacharya is a senior content writing executive. As a marketing enthusiast and professional for the past 4 years, writing is new to Barsha. And she is loving every bit of it. Her niches are marketing, lifestyle, wellness, travel and entertainment. Apart from writing, Barsha loves to travel, binge-watch, research conspiracy theories, Instagram and overthink.
