The Inheritance and Trustees' Provision Act 2014

The Inheritance and Trustees' Provision Act 2014 received Royal Assent on 14th May 2014, IPW President, Paul Sharpe, explains the principle changes which it brings.

The principle changes are:

Intestacy

If an intestate person died leaving no issue but leaving a spouse or civil partner;

The spouse or civil partner takes the whole estate. Parents no longer take a share.
If an intestate person dies leaving issue and a spouse or civil partner;

The spouse or civil partner takes personal chattels (as previously) though they have been defined as anything moveable other than money, business assets or 'investments'

The spouse or civil partner takes a fixed sum of £250,000 but there is a mechanism to increase this sum once the consumer price index has increased by 15% since yesterday (or the last increase for future increase).

Inheritance and Trustees Provision Act 2014

Any balance is divided as follows:

one half to the surviving spouse or civil partner and the remaining half to the issue equally - there is no longer a life interest for the share of the surviving spouse or partner.

Trustee Act 1925

s31 - The trustees can now apply income for a beneficiary 'as they see fit' replacing the previous test of 'as may in all circumstances be reasonable'.

s32 - The default limitation of one half of the capital over which trustees have access is removed - trustees now have discretion to advance all of the capital. This applies to any trust 'whenever created or arising' and is thus retrospective.

These changes remove the need for clauses such as Parkers 12.1-12.4 in Wills. Presumably there will be precedents in due course which put the 50% restriction of capital back in.

Inheritance Act 1975

People who have AT ANY TIME IN THE PAST been treated as children by the deceased are included in the class of people who can bring a claim as 'children'. This legislation received Royal Assent yesterday and is now law in respect to anyone who dies yesterday or afterwards.

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