New Words For Intestacy & Probate – And New Meaning

Increasingly, people are not making wills, or taking steps to ensure that their possessions and assets are settled and passed on after their death. The result is pain and heartache for those left behind.

If that happens, the person is declared to be intestate. That is defined as someone dying without a will, or having an invalid will. The person’s possessions and property will be disposed of in accordance with law, and administered by a court appointed executor or administrator. Some experts and commentators predict that intestacy numbers will rise over time. Whether that proves to be accurate or not, those future cases of intestacy will be handled under new updated rules, after intestacy was altered under recent legislation.

The Inheritance & Trustees Powers Act (2014) (ITPA) came into force in October 2014, bringing with it reform to the laws surrounding intestacy, amongst other provisions. Admittedly, though, the Act did not reform intestacy rules too greatly. Previously, if the deceased left both a spouse and children, they received split between them the deceased personal property, and a Statutory Legacy of £250,000. The remainder of the deceased’s estate was divided in half, with 50% going to the surviving spouse under a trust, and 50% to the children.

Under ITPA, though, the surviving spouse still received the same Statutory Legacy, and the personal chattels – and 50% of the estate outright. The 50% remainder is now divided amongst the surviving children or descendants under a life trust.

Where ITPA fails, however, is in addressing the issue of the deceased having remarried, perhaps several times. Further, what of children from those prior marriages? As divorce becomes less of a stigma, society has seen an increasing number of divorces. It is exactly the same with people marrying again – in some cases repeatedly. Indeed, the new rules dismally fail to address the matter of cohabitation.

According to Office of National Statistics, the numbers of cohabiting couples are only on the rise. Culturally and socially, it is becoming increasingly common and accepted for people to live together in long term, stable relationships- – but remaining unmarried. Much such couples often raise children together, or have property or similar assets in their joint names – but are still unmarried.

Whatever society might think, the law still resolutely fails to recognise such couples and relationships. Currently, the legal provisions set out in  Kernott v Jones [2011] and Stack v Dowden [2007] are the only legal protections that such  unmarried couples have. Even senior judges (notably Lady Hale) admit that those protections are not sufficient. In this instance, ITPA definitely missed an opportunity to address this, and to give unmarried, long term couples some degree of legal protection and afford them legal rights.

Aside from the slight alterations in dividing up the deceased’s estate, the term popular in equity and probate of “personal chattels” also was given a new meaning. Under Section 3, personal chattels are now defined as:

 “Tangible movable property other than any such property which consists of money or securities for money, or property used at the death of the intestate solely or mainly for business purposes, or was held at the death of the intestate solely as an investment.”

Section 3 updates the archaic thinking of the Administration of Estates Act (1925), which defined personal chattels previously. Now, Section 3 encompasses more types of property, and more modern types of property. Further, the nature of ‘property’ is (deliberately?) not specified in ITPA – which admittedly s both a hindrance and a great help when determining matters of probate. Quite clearly, this gives court appointed executors greater scope when disposed of the assets of the intestate, as the definition of a ‘personal chattel’ is now wider, and covers more.

An interesting definition was made in ITPA regarding such personal chattels. Previously, gifts and possessions such as wine collections, stamp collections, and similar were considered chattels. As such, they could be gifted, Under ITPA, the slight but subtle changed is that those and similar items can only be considered chattels (and therefore be gifted) if they were not held as an investment, but rather as personal property. Now, before such property is gifted, or handed on to relatives, it has to be determined that it was no an investment. For some things, that could take some proving either way – and more probate litigation. During that time, the value of the “investment” could rise or fall, potentially unfairly for those involved in the litigation.

Such reforms were cautiously welcomed by private client lawyers. Many felt that the new provisions did not go far enough regarding reforming intestacy. The reforms are very subtle, and quite technical, and seemingly cause more issues without addressing existing concerns.

Of such is the power or words and writing. Having received Royal Assent, the Inheritance & Trustees Powers Act (2014) is now law, and binding upon probate and intestacy proceedings. Whatever reservations probate and equity might have, intestacy proceedings (and some related private matters) now have to disposed of in line with the wording of the Act. Whatever interpretation lawyers choose to give to the provisions of the Act – the wording itself is now law, and has to be followed, however questionable that might be.

Will Drafting: Trust Funds And Avoiding Family Disputes

Recent years have seen fewer people making wills. Recent years have also seen a noticeable increase in cases involving people who have died with invalid wills, or with no will.

In both cases, the result is property, possessions and money that are tied up in litigation often for years. A further result is pain and further grief for the families concerned, and family and legal disputes. If only to avoid such pain, it is important to make a will.

Wills, probate and related legal matters fall under equity, well known in the legal world for being a complicated area of law. Wills and related documents need to follow the right formats, and to have the correct provisions under law. The rules of equity in some cases even dictate the exact words that need to be used.

Equity has its origins in Norman and Mediaeval England. As such, over the centuries it has evolved into a very complex, ponderous, and above all, formal area of law. The formalities, formula and conventions of equity must be strictly kept to to ensure that your will is valid. Despite the complexities, the rules of equity are there to protect you: those archaic rules ensure that your property is classed on to whoever you decide should inherit, and in what form.

With that in mind, when considering a will and treatment, it is vital to consult a lawyer. Even researching the principles of equity and the basics of will writing, and devising your own will are no substitute for getting an expert to write such an important document for you. A layman can easily make so many mistakes, or be unaware of so many legal matters, that their will will in most cases be declared invalid, or result in upset as provisions cannot be honoured. A lawyer will be able to ensure that your will is drafted in line with current legislation and rules, allows all bequests to be honoured, and above all remains valid.

When considering who to leave what property to, a lawyer will be able to advised you that some things you may want to do might not be possible at law, for whatever reason. However, in most cases, your lawyer will be able to come up with an alternative solution or suggestion.

As has been mentioned, equity has a ritual and language seemingly all of its own. All of which, however, makes perfect sense. One example is that the vast majority of wills will start with the phrase ‘I hereby revoke all other wills and testaments.’ Although cumbersome, what that means is that that will is the latest and most current expression of your plans for your possessions and property. That in itself is a fact worth remembering; that will will remain in place, and legally enforcible, until you draft and sign a new will.

Further, the wording used is quite important, with some words having a slightly different meaning to the equity lawyer and will drafter. Take, for example, a ‘gift.’ To the layman, that is often another term for a present. To the equity lawyer, a gift is property that passes (or will pass) to another without anything expected in return, and often with all the rights of ownership. Much property and possessions can be passed to another in a will, without the rights of ownership, or with conditions attached. It is therefore important to choose the right word – and the right manner in which to bequeath your property.

Once again, that merely serves to highlight the importance of having your will written by a professional expert. Although expensive, although time consuming in hours spent in consultations – it is a small price for peace of mind, for yourself and for your family.

Indeed, whilst consulting with a lawyer, they will be able to advised you as to several things you might be able to do with your possessions and property, for the benefit of your family – often things you were unaware of. A good example is a trust fund. Trust funds are popularly perceived as vast sums of money inherited by the rich. That is, in reality, not the case. Under equity, a trust can be made of most property, and can be structured in a variety of different ways. For example, the family home, in some cases, can be made into a trust under equity,and passed on as such. Money or possessions can be willed to various people in complete anonymity, if you so desire, or if it is necessary.

Those examples just go to show the mysterious ways of equity, and the various ways money and property can be passed on in your will. Without a will though – it is hard for your family and friends to inherit anything as you desire. That is why it is so important to consider such matters, and to consult a lawyer regarding making a will. Not only will that bring peace of mid to you – but it will make things much easier, and less painful for your family later on.