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WILLs & Powers of Attorney
0800 0352 781
020 7046 6078
Dec. 4, 2014

How the law has changed: Inheritance and Trustees’ Powers Act 2014.

Changes made by Inheritance and Trustees’ Powers Act 2014: Summary

Ensures that, where a couple is married, assets pass on intestacy to the surviving spouse in all cases where there are no children or descendants.

Simplifies the sharing of assets on intestacy where the deceased is survived by spouse and children.

Introduces a modernised statutory definition of personal chattels.

Protects children from the risk of losing an inheritance from a parent in the event that they are adopted after death of that parent.

Amends the rules that previously disadvantaged unmarried fathers when a child died intestate.

Removes arbitrary obstacles to family provision claims.

Reforms trustees’ statutory rights to use income and capital for the benefit of beneficiaries (subject to any express provisions in the trust document).

Changes to intestacy rules.

Amends the entitlement of the surviving spouse of a person who has died intestate.

For intestate deaths on or after the 1 October 2014, the ITPA replaces this table and provides that:

Where a deceased leaves a spouse, but no children or other dependants, the whole estate passes to the spouse.

Where the deceased leaves a spouse and children or other descendants:

the surviving spouse takes the personal chattels and a statutory legacy of £250,000, plus half of any balance of the estate outright;

the surviving children or other descendants take the remaining half on statutory trusts;

interest accrues on the statutory legacy from the date of death

the interest rate is the Bank of England base rate that had effect at the end of the day on which the intestate died

Spouse’s statutory legacy

the amount of the statutory legacy will be £250,000

The Lord Chancellor may make an order by statutory instrument to specify the amount of the statutory legacy at the time, but must make an order at least every five years

Personal chattels: New definition

A new, more modern definition of personal chattels covers all tangible movable property except for property:

Consisting of money or securities for money

Used at the death of the intestate solely or mainly for business purposes

Held at the death of the intestate solely as an investment

Preservation of contingent interests of adopted children

concerns the rights of an adopted child to the estate of a parent who has died before an adoption. A child who already has a contingent interest in the estate of his deceased parent when he is adopted should keep that interest as amended by section 4. The new provisions apply where the adoption occurs on or after 1 October 2014.

This provision closes a little-known trap that prevents children adopted following the death of a parent’s estate if they do not have interests that are vested in possession at the time of the adoption. Under the intestacy rules, a child who is under 18 and unmarried can only have a contingent interest. The trap also applies to contingent interests under Wills

The new rule applies to interests under Wills and the intestacy rules. However, it does not apply to contingent remainder interests or to the rights of children adopted during a parent’s lifetime.

Adoption also prevents a claim by a child against the estate of his biological parent under the IPFDA 1975. The ITPA 2014 has not changed this.

Unmarried fathers on intestacy: changed presumption

When a person whose parents were not married to one another at the time of his birth dies intestate, there is a rebuttable presumption that the deceased was not survived by his father or anyone related through his father. This presumption is disapplied if a person is recorded as the deceased’s father, or as a parent (other than the mother), on the deceased’s birth certificate

The amendment would therefore apply where a child, born as a result of fertility treatment on or after 6 April 2009, had a second female parent.