Sweeping changes to who gets your money

Laws governing what happens to an estate when someone dies without a will have undergone their first major shake-up in almost 100 years.

Old intestacy rules laid down in 1925 have been swept away by The Inheritance and Trustees’ Powers Act 2014 to simplify who inherits from an estate.

The act brings in four major changes in England and Wales from October 1, 2014:

  • If a married couple have no children, the surviving spouse inherits everything – and married couple means civil partners, gay and lesbian married couples
  • If the married couple has children, the surviving spouse receives £250,000 plus half of the remaining estate. The rest remains on trust for the children
  • Unmarried fathers win a slice of any inheritance if their children die – providing they are named on their offspring’s birth certificate
  • The courts can also rule dependent children win a share of the estate

These measures give intestacy rules a major makeover and remove the rights of distant relatives to claim a share of an estate.

Millions have no will

However, if the deceased has made a will, the provisions override the new rules.

The law does not affect bequeathing an estate to unmarried partners, who have no rights to an estate if there is no will.

New research shows that 60% of people have no will and 14% of adults have no idea about what happens to their estate when they die or how this would affect the finances of their loved ones.

The study by Co-operative Legal Services also reveals 32% of parents believe their children automatically take over their estate, while 10% think their money and property will go to their brothers or sister and 7% expect the estate will be shared equally among their family.

Why you need a will

The main reason for not making a will is simply most people have not got round to it (41%), another 26% feel they have nothing of value to leave and 20% believe they are too young to make a will.

Another 12% have no will because they do not want to think about their death.

“Making a will is the only sure fire way to make sure your money and possessions go to the people you want to have them,” said a spokesman.

“Dying without a will means your family and loved ones lose control of what happens to your estate and can leave them struggling financially.

“The new rules are a big improvement on the old measures, but still do not guarantee those who you want to benefit from your life’s savings are properly looked after.”