For the first time in decades the rules about what happens to your money when you die are changing. So what are the changes and how will they affect your money or what you get from relatives?
The UK rules about what happens when a person dies without having made a will, a term known as intestacy, change on 1st October 2014. This is something that affects a lot of families as around one in three people die without a valid will in place.
The change of rules will adjust how much a spouse or civil partner is entitled to when there are no children and simplify how an estate is shared when there is a partner and children.
Under the changes, partners will have greater rights when there are no children.
– Surviving spouses or civil partners. Where there are no children, if a spouse dies intestate then the surviving spouse or civil partner inherits the whole estate. Under the old rules they only received up to £450,000 and the rest was split between siblings and parents.
– Surviving children. Where children are involved, under the new rules, the surviving spouse or civil partner would inherit the first £250,000 and then half of the remainder of the estate, with the remaining assets being held for the deceased’s children. This has removed the life interest trust which only gave the spouse a right to receive the income from that half share.
– Siblings and parents. Previously, the siblings and parents of someone married and childless would have inherited a share of an estate if it was worth more than £450,000. But this is no longer the case as the entire sum goes to the surviving spouse.
It’s still the case that, without a will, you cannot control who inherits and what they inherit — especially if there are no living relatives.