The Inheritance and Trustees Powers Act 2014 was given Royal Assent during May with some significant changes included. The changes are in respect to married couples and the Act now states that where someone dies intestate leaving a spouse/civil partner and no children, the entire residuary estate will pass absolutely to the surviving spouse/civil partner.
In addition, the new Act aims to simplify the sharing of assets on intestacy where the deceased is survived by a spouse/civil partner and children. Currently the surviving spouse in entitled to the personal possessions and a statutory legacy of £250,000 plus a life interest in half of the balance of the state which would then pass to children on subsequent death. The other half is held for the children on statutory trusts.
So what’s changed?
The new act amends this provision so that the first £250,000 plus half of the balance of the estate passes to the surviving spouse absolutely. The other half would still pass to the children, held again in trust until the age of 18. However, this means that the surviving spouse/civil partner would be free to deal with the assets as they wished instead of only having a right to the income. This would also involve less administration of the personal representatives, as this share would not be held upon trust. It also means that the children do not have to wait for the surviving spouse to die in order to inherit. Interesting situation in the circumstance where the surviving spouse is from a second marriage, the children are from the first marriage and relations are perhaps somewhat strained.
Why is this of interest to our advisor network?
Well, even more reason to ensure your clients wills are in place and up to date as part of their overall asset protection strategy. BTWC Ltd can support you in providing this service, from training to product manuals and customer query support. Drop us a line on firstname.lastname@example.org to extend your portfolio.