Intestacy and Family Provision Changes May 2014

Inheritance and Family Provision

The Inheritance and Trustees’ Powers Act 2014  changes the inheritance and family provision situation on intestacy and in three areas of the law.  It will make some reforms to simplify and update the law of intestacy (which determines the way an estate is distributed in the absence of a will). It will adjust some technical rules on the Inheritance (Provision for Family and Dependants) Act 1975.  That Act permits certain family members and dependants to apply to the court to vary the distribution of an estate.  It also amends the Trustee Act 1925 so as to bring trustees’ powers to apply funds for the benefit of beneficiaries into line with current practice.

The Act implements the majority of the proposals contained in the Law Commission report to bring inheritance law into line with the needs and expectations of families. It will make it simpler for people to deal with the practical and financial issues that arise when a family member dies, and simplifies the administration of trusts.

Intestacy and Family Provision: the Bill was introduced into the House of Lords in July 2013 and received Royal Assent in May 2014.

The Law Commission’s report on inheritance and family provision also dealt with inheritance rights of cohabitants but these were contained in a separate draft Bill as the Law Commission acknowledged that these recommendations raised issues that did not apply to the Inheritance and Trustees’ Powers Bill.

After careful consideration, the Government decided that the Law Commission’s recommendations about rights for cohabitants upon intestacy would not be implemented during this Parliament. This is consistent with the Government’s response to the Law Commission’s previous report, Cohabitation: Financial consequences of relationship breakdown, and reflects the continuing priority for family justice of completing the Governments significant ongoing reform programme when it comes to intestacy and family provision.