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Intestacy Laws

The following changes were made to the laws of intestacy from February 09 onwards.

When a person dies without having made a valid Will, he or she is said to have died intestate and his or her estate must be divided between certain people in accordance with the following rules:

If there is a surviving spouse and surviving children:
The spouse takes:

The personal effects (the deceased's personal belongings and chattels).
£250,000 free of Inheritance Tax.
A life interest in half the remainder of the estate.

The children take:

The other half of the remainder of the estate.
The capital comprising the spouse's life interest fund when the spouse dies.

If there are children but no surviving spouse:

he children take the whole of the estate in equal shares.

If there is a surviving spouse and no children but a parent or parents of the deceased:
The spouse takes:

he personal effects.
£450,000 free of Inheritance Tax.
One half of the remainder of the estate.

The parents take:

The other half of the remainder of the estate.

If there is a surviving spouse and no children and no parent of the deceased but brothers or sisters of the deceased: The spouse takes:

The personal effects.
£450,000 free of Inheritance Tax.
One half of the remainder of the estate.

The brothers/sisters take:

The other half of the remainder of the estate.

If there is no surviving spouse and no surviving children, then the estate goes to the following in order of priority:

Grandchildren (or remoter issue).
Parents.
Brothers and sisters (and the children of any who have died).
Grandparents.
Uncles and Aunts (and the children of any who have died).

If there are no relatives in any of the above classes:

The whole estate goes to the Crown or the Duchy of Lancaster or the Duke of Cornwall


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	The Importance of Succession Planning By Lee Allan Head of CBN Financial Services
Lee is a Life Member of MDRT the premier international association of financial professionals and speaks internationally as an Ambassador for MDRT with Articles published in the Manchester Messenger, the monthly journal of the Manchester Law Society (December 2008) and in the Newcastle News, the monthly journal of the Newcastle upon Tyne Law Society (June 2009). Most business owners would, if asked be willing to implement a Business Continuity plan and avoid the disastrous consequences and hardship that they, their families and their employees may face on the death and or disability of a shareholder/Key person. It’s just that no one has ever discussed it with them! How long do you think a businesswould survive if it lost a Shareholder/Key Person? Not as long as you might think as the failure rate is frightening, 17% collapse in month one, 6% one to three month, 15% four to six month, a further 15% six month to one year and only 47% survive longer than one year. (Source: Legal & General Protection Survey 2003). Succession planning has recently been formalised in the new British Standard, Business Continuity BS25999.The need for Shareholder Protection arrangements along with the relevantdouble option agreements, Key Person loss of profit insurance and loan protection cover etc, are all features of this latest standard. Business owners don’t often consider how they would cope financially if a shareholder or a key worker in their business fell ill ordied unexpectedly. Over 100,000 UK businesses fail each year because the owners haven’t adequately planned for the future or protected against the unexpected and thousands more face realfinancial hardship. (MORI Succession Survey November 2006)

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