When someone dies without a will – i.e. intestate – their assets are distributed according to the rules of intestacy. For example, where someone dies intestate and leaves a surviving spouse or civil partner but no children, the survivor is entitled to the statutory legacy: all the deceased’s possessions (chattels), the first £450,000 of the estate and half of whatever’s left – the rest goes to the parents or brothers and sisters if there are no parents. Where there are children, the surviving spouse or civil partner has a similar entitlement but has a £250,000 legacy and chattels and a lifetime interest in half of whatever’s left – the balance goes to the children.

Where someone dies without making suitable financial provision for someone who could reasonable expect it, whether or not there’s a will, the disappointed person can make a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

The intestacy rules and family provision under the 1975 Act are important areas of the law with practical day-to-day relevance and effect. Given that anything between half and two thirds of the adult population don’t have a will, the intestacy rules ought to make adequate provision for close family members and / or dependants. Where they don’t, the law ought not to obstruct valid claims under the 1975 Act.

In 2008, The Law Commission set about examining the Anglo-Welsh intestacy rules and their interaction with the 1975 Act. Given that the intestacy rules had not been seriously revised since their creation in 1925, and the 1975 Act had not been reviewed since its enactment, were they still fit for purpose in modern society? The fluidity of modern family relationships is such that, although our intestacy rules provide certainty, their one-size-fits-all-circumstances approach can cause inequitable outcomes including, in some cases, homelessness. In addition, it has been necessary for deserving claimants (for example a surviving unmarried cohabitant) to bring actions for reasonable financial provision from the deceased’s estate under the 1975 Act.

Inequitable outcome

Consider, for example, a typical asset-rich but cash-poor couple (whether married, in a civil partnership or cohabiting), with two or three children. One of the couple dies, intestate. The effect of the limited statutory legacy might easily be to force the sale of the family home in order to pay out to the children. Litigation might have to be entered into, with lawyers appointed to act in the children’s interest defending the action brought by the surviving parent in order to keep a roof over the family’s heads. Needless to say, the present intestacy rules on their own would not help a surviving cohabitant, notwithstanding his or her parenthood of the deceased’s children. Similarly, if any of the children are by a previous relationship of the surviving partner’s, but were being provided for by the deceased, it would be necessary for them to make a claim for reasonable provision under the 1975 Act.

Consultation

The Law Commission has consulted widely and has conducted research amongst focus groups and considered the results of a survey of public attitudes to will making and intestacy as well as data from HMRC regarding the value of testate and intestate estates.

The Law Commission’s recommendations

The Law Commission’s report was published in December 2011 and sets out its proposals for reform and presents two draft Bills to implement the proposed reforms.

The draft Inheritance and Trustee’s Powers Bill would, if made law, make sure that all the assets of someone who dies intestate would pass to their spouse or civil partner where there are no children or other descendants. If there are children, then the spouse or civil partner would receive a statutory legacy. However, rather than the statutory legacy being a cash sum and a lifetime interest in half of whatever’s left over in the estate as at present, The Commission proposes that it should be a cash sum and an outright entitlement to half of everything left over.

The Commission also proposes that the 1975 Act should be amended so that someone claiming to be a dependant of the deceased can bring a claim, even if the deceased did not maintain them financially during lifetime. It goes on to say that someone that the deceased treated as a child of the family ought to be able to make a claim under the 1975 Act even if the deceased was not married or in a civil partnership.

The draft Inheritance (Cohabitants) Bill would, if made law, enable a surviving cohabitant to inherit from the deceased’s estate under the intestacy rules without having to make a claim under the 1975 Act claim, if they had cohabited for five years. If they had a child of the family living with them as at the date of death, the qualifying period would be two years.

For further details, and to download the draft Bills, please visit www.justice.gov.uk/lawcommission/areas/intestacy-and-family-provision-claims-on-death.htm

The Society of Will Writers (SWW), the UK’s leading professional
body for the will-writing industry, is once again hosting Single Parent Month throughout January. Research has shown that
single parents are one of the most likely groups not to have a will and the SWW
is keen to change this.

We are offering single parents throughout the UK a chance to have
their will written at a greatly reduced cost in the hope it will make them
think about their children’s future and ensure, should anything happen to them,
their children’s’ welfare is assured and that they would be entrusted to the
person that they want to care for them, instead of leaving it to chance.

SWW Director General, Brian McMillan, said: “As parents with young
children most of us never think about dying but sadly not all parents live long
enough to see their children grow up. For single parents particularly, a will
is the most important thing you can do for your children to ensure that
guardianship and trusts are put in place should the unthinkable happen before
your child is 18.

Throughout the month of January, Abbey Broadway consultants  across the country
will be offering to write a single parent’s will for a fixed fee of £35
regardless of circumstances.

For further information about this initiative, or
to book an appointment , please contact us on 08450 526 840 or email info@abbeybroadwaywills.co.uk

The largest part of the report focuses on the area which causes
the most significant problems under current legislation. Where a couple live
together, but are unmarried, the current law dictates that the survivor is not
automatically entitled to inherit any part of the deceased’s estate. This is
the case regardless of the period of time the couple have ‘cohabited’ or
whether or not they have had children together.

According to the report; research suggests that there are 2.3
million cohabiting couples within the UK and that the current trend means this
figure will be closer to 4 million within the next 20 years.

The Law Commission recommend reform of this current legislation
but with limited scope.

They recommend that a bereaved,unmarried, partner should not need to go to
Court in order to inherit a share of their partner’s estate where the couple
has cohabited for at least 5 years prior to death.

This period is reduced to two years where the couple have had
children together.Although the Commission are reluctant to lower this period of
time to include all cohabiting couples, regardless of

the length of the cohabitation period, it recommends that the period required
before a claim against an estate can be made is lowered from the current two
year period.

These changes would bring English law into line with the current
law in other Commonwealth jurisdictions.The report contains a draft Bill, the
Inheritance (Cohabitants) Bill, which has been deliberately separated from
other  recommendations

The proposals have prompted lively debate across the industry; the focus being
on how a ‘cohabitant’ should be identified and how it is possible to establish
that someone was, or was not, living in accordance with the provisions of the
Bill at the time of death.It does not state at what point the status of an
‘unmarried partner’ is acquired or lost and the vagueness of the definitions
has been criticised. The new legislation, if it is enacted, could cause
problems for those dealing with an intestate estate

Aside from cohabitation the report also reaffirmed the automatic
right of spouses to inherit, but discussed proposed changes to how the current
intestacy rules deal with the estate. They recommend that, where a spouse dies
leaving no children, the surviving spouse should inherit the entire estate.
This contrasts with the current provisions that provide a surviving spouse with
the first £450,000 of an estate with the rest being shared with the deceased’s
parents or siblings.

Where a spouse dies leaving children the current £250,000
statutory legacy will remain but the Commission have recommended that the
current complex trust and life interest provisions relating to the rest of the
estate are to be simplified. Instead, the spouse will split the remaining
estate with the children outright. This view was highly supported in the
consultation however ideas to deal with the family home separately received
little support and have been shelved.

The full report can be downloaded from www.lawcom.gov.uk

The Mental Capacity Act 2005 provides a
legal framework to help empower people to make their own decisions and to make
clear what actions carers and family can take. It puts the law on advance
decisions (or living Wills) on a clear statutory basis for the first time. The
rules relate particularly to advance decisions to refuse treatment, including
refusal of life-sustaining treatment.

Mental capacity

When you are ill,
you can usually discuss treatment options with your doctor and then jointly
reach a decision about your future care. However, you may be admitted to
hospital when unconscious or unable, on a temporary or permanent basis, to make
your own decisions about your treatment or communicate your wishes. This may
happen, for example, if you have a car accident or a stroke or
develop dementia. To use the legal term – you would ‘lack mental
capacity’ to make an informed decision and /or communicate your wishes.

In such situations, doctors have a legal
and ethical obligation to act in your best interests. One exception to this is
if you have made an advance decision refusing treatment. If this decision is
valid and applicable to the circumstances, medical professionals providing your
care are bound to follow it – whether or not they think it is in your best
interests.

Advance decision or advance statement

Advance decisions and advance statements
are the formal names for the two different types of ‘living Will’.

The term ‘living Will’ doesn’t have a
legal meaning but can be used to refer to either an advance decision or an
advance statement.

An advance decision is a decision to
refuse treatment; an advance statement is any other decision about how you
would like to be treated. Only an advance decision is legally binding, but an
advance statement should be taken into account when deciding what is in your
best interests.

Why make an advance decision?

You may wish to make an advance decision
if you have strong feelings about a particular situation that could arise in
the future. This might relate to having a limb amputated following an accident
or having a blood transfusion.

More commonly, you may have been told
that you have a terminal illness or form of dementia. You may wish to prepare
an advance decision indicating the type of treatment you would not want to
receive in the future. Making an advance decision may give you peace of mind
knowing that your wishes should not be ignored if you are unable to take part
in the decision-making process at the relevant time.

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My mother died and therefore the estate has passed to my
mother. Is her will still valid, ie will the estate be divided equally between
the children when she dies

A: To be absolutely sure you would have to look at the terms
of the will.

If a beneficiary of a will dies before the person who has
made it, the gift of that beneficiary will fail and you will need to look at
whether the will has substituted beneficiaries. The will remains valid if your
mother does not remarry, since marriage automatically revokes any current will.

If your mother remarries and forgets to make a new will, the
estate will be distributed in accordance with the rules of intestacy, which
puts the spouse first.

Q:My  husband and I were separated but not divorced, and he has now died leaving a will in which he gives his share of the house to our
three daughters
  Our ownership of the house was split 50/50 by a notice of severance
Will i have to go to court to have this overturned ?

A: When couples separate it is standard practice to issue a Notice of Severance. By
signing such a notice, the property is held as tenants in common so that each
party is able to dispose of their half share under a will

The children may have to go to court if you refuse to sell
or buy out their half share in the property

However, since you weren’t divorced at the date of his death you may be able to
claim a share of your husband’s estate if no provision has been made for you

With sweeping cuts in funding due to the current economic climate and with charities facing problems maintaining and renewing sources of donations, legacy income is more important than ever to the vital work of UK charities.

If you are considering remembering a charity in your Will, here are some basic tips to ensure that your chosen charity receives your generous gift.

Make a Will

There are a variety of schemes and organisations offering free Will writing services, where the fee is waived in return for a gift to a charity in your Will.

Whether you take advantage of such a scheme or not, see a professional to record your wishes independently. You might want to let your family (or anyone else who might expect to be included in your Will) know about your intentions, especially if the gift to charity is large in proportion to the size of your estate.

It is impossible to prevent people fighting over your estate when you have gone, or to prevent someone from challenging the validity of your Will, but you can minimise the risk by having your Will prepared and executed by an independent third party such as a Will-writer or solicitors’ firm.

Remember a charity in your Will – and get the details right

In the Will itself, make sure you identify the charity correctly, to avoid confusion, as some different charities have very similar names. Most charities will have a unique registered charity number (which can be found on the Charity Commission website at www.charity-commission.gov.uk), which you should be include in the wording of the legacy. Check with the charity itself if you are unsure.

Make sure your gift to charity is as flexible as you want it to be

Although you may be particularly interested in a specific project – for example the building of a local hospice by a national charity – you may still wish to leave the gift to that charity for its general use if, at your death, the project is finished or no longer needed. Alternatively, you could leave a gift for the charity’s general purpose, but with the wish that it is used on a certain project.

Similarly, if you leave money to a local branch of a charity, the gift may be restricted for the use of only that branch. If this branch does not exist on your death then the gift may fail. If this is not your intention, you should ask for advice on how to leave a gift so that use of the funds is unrestricted.

Lastly, the current climate will see even more charities changing their names, amalgamating with, or transferring assets to another charity. If you still want your favoured charity to benefit in these circumstances, your adviser can include a “Cy-près clause” which will facilitate this.

Leave the choice to your executors if unsure

If you want to benefit a charity but are unsure which one to choose, you can leave a gift in your will and allow your executors or trustees discretion to choose which. Be aware though that, once it has gone through probate, your will is a public document. Many charities are informed when gifts are left with a discretion to choose the charitable recipient and your executors or trustees may be inundated with requests from charities, which may be upsetting and / or irritating for your executors – especially if they are close family or friends.

Remember that professionals or charities can act as executor

If a charity is one of the main beneficiaries (or indeed your only beneficiary), it may be preferable to appoint a professional as executor rather than a lay person, or indeed to appoint the charity itself as your executor. The charity can then deal with the administration of the estate, or appoint its chosen representatives to do so on its behalf.

Taking the heat out of the process

Sometimes, letters from charities may unintentionally upset lay executors or seem unduly intrusive. This is because lay executors may not fully understand why charities make certain enquiries.

Charities are legally obliged to collect in assets and to ensure that they are receiving everything to which they are entitled. They are also in a different position when it comes to making ex-gratia payments (i.e. voluntarily reducing the amount they receive) than an individual person.

Charities may have technical questions about, for example, expenses of the estate, which professional executors would be able to field and answer with ease.

There also may be technical matters to consider where one of the beneficiaries is a charity, as the way the assets are treated may minimise or reduce the tax to which the estate is liable.

Additionally, professionals dealing with the estate may be able to speed up the administration of the estate meaning that both personal and charitable gifts are received faster.

In brief, you need a will so that YOUR wishes are carried out after your death. All too often, a person dies and someone in the family gets greedy, denying other family members of their rightful share of the estate.

If  you and other affected relatives aren’t already seriously rich, they won’t be able to fight the greedy relative because of the prohibitively high costs involved in pursuing action through court.

Intestacy cannot be challenged in Court – don’t make your relatives have to deal with further agony after your death.

Imagine for a moment, that you die without having a Will:

• Your spouse will not automatically inherit your property and possessions – everything is divided according to the out-dated laws of Intestacy.

• If you are unmarried, your partner will receive nothing – Intestacy law doesn’t recognise common-law relationships

• If you have children, guardianship of the children would become the decision of  the Court, who will decide their future, where they live, and who looks after them

• If you intend to leave something to your friends or grandchild(ren),  they will get nothing under the laws of Intestacy. Same for your step-children, no matter how long you’ve lived with them.

By making a will, YOU ensure that the right things go to the right people. It prevents and avoids family squabbles,  and also minimises inheritance tax on your estate.

This enables your spouse and children to inherit the maximum amount possible in the shortest amount of time, without any bank accounts being frozen or house sales being forced.

In certain circumstances our Will Writers can advise you regarding mitigation of care home fees for the elderly.

Call us today on 08450 526 840 or use our simple online form