10 October 2014
Changes to the Inheritance and Trustees Powers Act 2014
The Inheritance and Trustees Powers Act (ITPA), which amends existing provisions for surviving spouses (including civil partners) and makes changes to the law relating to the power of trustees, came into force on 1st October 2014.
Having received Royal Assent earlier this year, on 14th May 2014, the Act brings to fruition a six-year project undertaken by the Law Commission to review older legislation in order to reflect the dynamics of modern family life. In this article, we'll run through a selection of the most significant changes to the law and how they could impact upon you.
The ITPA makes key reforms related to intestacy, which refers to the estate of a person who dies without having made a will. Under existing law, in these circumstances, the first £450,000 of the estate, in addition to the deceased's belongings, will pass to the spouse or civil partner. Under the new law, however, when a person dies leaving no will the surviving spouse or civil partner will inherit the entire estate, whatever the value.
There are also important changes related to the definition of "personal chattels". This term has been amended to apply to all tangible, movable assets except for property which consists of money or security for money and property that was, at the time of death, used solely for business purposes or held as an investment. However, this new definition will only apply to wills made on or after 1st October 2014, when the law came into force.
Other amendments have brought new clarity to issues surrounding family provision. Following the Act, if the deceased leaves issue, the surviving spouse or civil partner will now receive the first £250,000 of the value of the estate, the deceased's personal chattels and half of the remainder of the estate, whilst the deceased's issue will receive the other half of the remainder of the estate.
Dermot Kirkwood head of the Wills and Trust Team advises:
“These new provisions apply to separated spouses (or civil partners) whose divorce has not been finalised, and in these circumstances a will is particularly important. In addition some couples may consider that the provisions are too generous to the surviving spouse, particularly where there are children of an earlier marriage, and so a Will is required to redress the balance.”
The ITPA also makes some changes to the law which may make it easier for certain cohabitants to make a claim against their deceased partner’s estate.
At Longden Walker & Renney, our Wills, Trust and Probate solicitors have been helping families for generations with Wills and Trusts. Our experienced team members can offer friendly, personal and cost-effective advice. You can enquire about our Wills and Trust services using our contact form, or call 0191 5666 500 for free, no-obligation advice.