The Inheritance and Trustees' Powers Act 2014, which received Royal Assent on 24 May 2014, is the result of a six year project by the Law Commission to address the issues arising from the statistical evidence that, in England and Wales, up to two thirds of adults do not have a will, and the number of intestate death is significant.  It is anticipated that the Act will come into force on 1st October 2014.

The Act amends, but does not replace,  the Administration of Estates Act 1925, which remains in force.

The Act implements a number of reforms to the current rules which apply when an individual dies intestate.  Note that the provisions regarding the requirements for  Personal Representatives on intestacy remain unchanged.

The major changes are as follows:

1. If an intestate dies leaving a spouse or civil partner but no issue (i.e. children or grandchildren) their estate will pass to that partner absolutely.  This removes the rights of parents and siblings on intestacy in relation to estates worth more than £450,000. That will therefore affect forced heirship rules applicable within Europe which can operate differently;
2. If an intestate dies leaving a spouse or civil partner and issue it is still the case that the spouse or civil partner receives 'personal chattels', rather than intangibles, absolutely, and the statutory legacy of £250,000.

However the residuary estate (i.e. anything remaining in the estate) will, for deceases after the date of the Act's coming into force be treated differently under the new rules:

The prior position was that the surviving spouse or civil partner would receive a life interest in one half of the residue, with the remaining half being held on the statutory trusts for the issue of the intestate.

The position under the 2014 Act will be that the surviving spouse or civil partner will now receive their half of the residue absolutely. The remainder will be dealt with under the current rules as to dependents.

The changes will have significant effect on those immigrants who establish their habitual residence in England and Wales who die without a testamentary disposition and who have property within the European Union under the umbrella of the recent European Succession Regulation.  If they die without a will, and habitually resident in England and or Wales, the new rules will apply.

However, when the draft Matrimonial Property Régime Regulation comes into force, in theory in August 2015, the question will arise: will an intestate succession for such individuals arise,  or will the English courts admit that the dispositive provisions of a foreign matrimonial property régime apply, outside the current caselaw on ancillary relief on divorce?  Where the deceased has children, the matter will become significant, particularly as the Act also extends the definition of Children who may make a claim under the current dependency provision.

The tax implications are that no chargeable settlement arises over the half of the estate devolving to the spouse or civil partner under the statutory trusts, as they have no Life Interest in it.

However the presence of a statutory trust could cause tax difficulties for a French individual's succession where they die intestate in France, owning an English property, and relying on a French matrimonial property régime to deal with their English assets.

 

The Act also makes amendments in relation to dependants under the Inheritance (Provision for Family and Dependants) Act 1975.

The 1975 Act allows close family and dependants of the deceased to bring a claim for provision from the deceased's estate where they have not been provided for.

The definition of who is entitled to bring a claim, as a person treated by the deceased as a child of the family, will be extended to include any person who was treated by the deceased as a child of the family, not only in relation to a marriage or civil partnership, but in relation to any family in which the deceased had a parental role.

There are also important changes to the provisions which apply to an individual who is treated as being maintained by the deceased.  The previous provisions provided that a person should be treated as being maintained by the deceased if the deceased was, otherwise than for full valuable consideration, making a substantial contribution towards that person's reasonable needs.

Under the new provisions, the words "otherwise than for full valuable consideration" will be omitted.  This avoids the previous situation where a claim might fail where the applicant was providing for the deceased in the context of an interdependent domestic relationship.

 

So, Continentals moving to the United Kingdom may need to review their succession arrangements in the light of this new legislation, which applies only to England and Wales. It does not apply in Scotland or Northern Ireland or outside teh Probate Court's jurisdiction.   However, as it forms part of the English law of succession, as defined in the Succession Regulation, it will be applicable within the EU for deaths occurring after 17th August 2015 where a deceased dies intestate with their habitual residence in England and Wales.

Quite how that is to work is another matter, as the definition of land and real estate is limited to the definition in the Law of Property Axt 1925, which again is limited to England and Wales.

The Administration of Estates Act 1925, which defines the Probate procedure in Engald and Wales is subject to a similar territorial limitation.  There lie other traps for the unwary and unadvised.

 

There is no point in opting for a purely domestic system which is deliberately drafted so as not to have any form or substance outside England and Wales, for example, in France. The German notariat behind the Regulation have no understanding of this and neither do the offcials at the European Commission who were apparently  "in charge", but as usual out for lunch.

Simply drafting a will referring to the law of the nationality is just not enough. The Regulation does not actually provide for the British territorial limitations on the scope of the administration statute or for that matter for the requirement that the English courts have material not theoretical jurisdiction and involvement  over the probate administration  and intestacy, which is simply ignored in the EU Regulation in the naive belief that it will be "allright on the night"; the public order equivalent of a bad hangover more like.

 

Before drafting a will in France under your nationality  you need to take grounded advice