Changes to the Intestacy Rules
With all the other major headlines dominating the news recently, it may have passed some by that the intestacy rules have been changed. Read on to learn what changes have been made to the intestacy rules. This is useful information for CII AF1, AF5, CF1, FA1, J02, R01, and R06 candidates.
THIS ARTICLE IS RELEVANT TO EXAMINABLE TAX YEAR 2019/20.
The previous rules came into force on 1st October 2014, and at the time, it was stated that the statutory amounts will be reviewed at least every 5 years and will rise in line with CPI.
So to that end, new rules have applied since 6th February 2020.
The Current Intestacy Rules
Current rules now state that if a spouse is survived with children, then the spouse gets £270,000 plus all the personal belongings plus half of the remaining estate outright. Adult children will take the other half outright, and if any of the children are minors at the time of death, the property is held on trust for them usually until they reach age 18.
The update is, of course, an improvement, but the advice has not changed and that is – make a will! Even if £270,000 seems like a decent amount, once you imagine that a property is often worth more than this, and the children are entitled to 50% of anything over this amount, then you can see that an awkward scenario could take place if the children force the sale of the home.With all the other major headlines dominating the news recently, it may have passed some by that the intestacy rules have been changed. Click To Tweet
Reasons to Make a Will
Other reasons to make a will include:
- the deceased person’s estate can be distributed exactly as they intended, and this can be done usually with a view to reducing any IHT
- if children are minors, then a will can stipulate who should look after them in the event of both parents’ death
- executors of their choosing can be appointed
Requirements for a Will to Be Valid
And just as a quick reminder, for a will to be valid it must:
- be made by someone over the age of 18
- be made by someone of sound mind
- be in writing
- have been made with no coercion
- be signed in the presence of two witnesses both over the age of 18
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