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The Inheritance and Trustees’ Powers Act 2014

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The Inheritance and Trustees’ Powers Act 2014 (“the ITPA 2014”) received Royal Assent on 24 May 2014 and will come into force on 1 October 2014.

The ITPA 2014 is a result of a six year project by the Law Commission to address, amongst other issues, the issues arising from the thousands of people who die without leaving a will every year. This blog focuses particularly on the changes made by the ITPA 2014 to the intestacy rules and the Inheritance (Provision for Family and Dependants) Act 1975.

Intestacy Rules

The ITPA 2014 implements a number of reforms to the current intestacy rules which apply when a person dies without leaving a valid will.

The most significant changes are as follows:

If a person dies intestate leaving a spouse or civil partner but no children or grandchildren, their entire estate will pass to their surviving spouse or civil partner absolutely. This removes the provision for parents and siblings in intestacy in relation to estates in excess of £450,000.

If a person dies intestate leaving a spouse or civil partner as well as children or grandchildren, it remains the case that the surviving spouse or civil partner receives all of the deceased’s personal chattels absolutely and the statutory legacy of £250,000. However, the residuary estate (what is left after the legacy and the chattels) will be treated differently as a result of the ITPA 2014.

Prior to the ITPA 2014 coming into force, the surviving spouse or civil partner would receive a life interest in one half of the residue (a right to the income produced from the amount) and the remaining half of the residuary estate would pass to the deceased’s issue (to be held on trust if minor children are involved).  As a result of the ITPA 2014 however, the surviving spouse will now receive that half of the residue absolutely and be free to spend the capital and not just the income produced.

Inheritance (Provision for Family and Dependants) Act 1975 (“the I(PFD)A 1975”)

Regardless of whether the deceased left a valid will or not, certain family member and financial dependants may apply to the court for reasonable financial provision from the deceased’s estate under the I(PFD)A 1975.

The ITPA 2014 makes three key changes to the I(PFD)A 1975:

The definition of who is entitled to bring a claim, as a person treated by the deceased as a child of the family, will be extended to include any person who was treated by the deceased as a child of the family, not only in relation to a marriage or civil partnership, but in relation to any family in which the deceased had a parental role. This is a recognition of the fact that a family unit may exist outside of what are considered to be traditional families.

The ITPA 2014 also makes changes to the provisions which apply to a person who is treated as being maintained by the deceased. Previously, the provisions of the I(PFD)A 1975 provided that a person should be treated as being maintained by the deceased if the deceased was, otherwise that for full valuable consideration, making a substantial contribution towards that person’s reasonable needs. As a result of the ITPA 2014, the words “otherwise than for full valuable consideration” will be omitted. This avoids the potential situation where a claim might have previously failed where the applicant was making an equal contribution to that of the deceased towards the relationship.

The ITPA 2014 also amends the provisions of the I(PFD)A 1975 so that a claim on behalf of an applicant can be issued with the Court before a Grant of Representation has been issued.

These changes are likely to result in an increased number of claims under the I(PFD)A 1975 as they widen the categories of applicants able to pursue a claim. The removal of the requirement for a Grant of Representation to have been issued before a claim could be made may also enable claims to be dealt with quicker and reduce the costs involved.

Clarion’s Disputed Wills, Trust and Probate team are always happy to have an initial chat if you require advice or assistance following the death of a loved one or family member. Please therefore feel free to contact me Louise Dodds or call the team on 0113 246 0622.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.