February 1st saw other changes to the intestacy laws that have been less well advertised. The Intestate Succession (Interest and Capitalisation) (Amendment) Order 2008 amends the previous order of 1977 and updates the tables used for determining the capital value of the portion of the residuary estate in which a surviving spouse or civil partner has a life interest on intestacy. The current provisions for intestate estates are contained in the Administration of Estates Act 1925 (as amended) and govern who in a deceased person’s family will receive what when there is no Will or a Will is found to be invalid.  Where a person dies leaving a surviving spouse or civil partner they will receive a fixed sum (the statutory legacy), the amount of which is determined by whether there are any surviving children, and a life interest in half of the residuary estate.  The other half passing absolutely to the children. 

The surviving spouse or civil partner will receive an income generated from the life interest for his or her lifetime and then the capital sum passes to the children. However, the spouse or civil partner may elect to have the life interest redeemed rather than receiving the income and receive its capital value.  This election must be made within 12 months of the grant of representation to the intestate’s estate. The capital value of the life interest is calculated using the tables contained in the 1977 Order which takes into account the survivor’s sex and age along with yields on Government stocks.  It was argued that the current calculation method is outdated and impractical.  Although the new Order changes the tables by taking into account the revised mortality assumptions and range of yields the method of calculation itself has not been changed.

A full review has been promised by the Law Commission in 2011 which will consider making fundamental changes to the surviving spouse’s or civil partner’s life interest.

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