Overdue reforms on intestacy imminent: If you die without having made a will your spouse will not automatically inherit the family home. Sue Fieldman looks at the likely changes

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CHANGES in the law relating to intestacy - when you die without making a will - are due to be announced shortly after Easter.

They could at long last mean an end to the severe financial hardship suffered by so many who have to pick up the pieces on someone's death.

About 60 per cent of the population die intestate. They go to their grave under the misconception that their spouse will automatically inherit the whole estate. Under the present intestacy law, this is not always the case. There are strict financial limits about what the spouse can inherit.

The Law Commission recommended changes in 1989. The Lord Chancellor's Department appears at long last ready to implement reform. A spokesman confirmed this week that an announcement is expected 'shortly after Easter'.

The Lord Chancellor may adopt the Law Commission's proposal that the surviving spouse should get all of the deceased spouse's estate provided that he or she survives for 14 days.

It would undoubtedly be the most sensible and popular reform. However, the bureaucrats may think that the concept of 'spouse has all' is just too simple and a disincentive for people to make a will.

However, there will be uproar if the Lord Chancellor does not at least announce that the law is being reformed to ensure that the surviving spouse will be entitled to the matrimonial home. At present if the house is in joint names there is no problem - the surviving spouse will automatically inherit.

However, in other cases, the intestacy rules can cause grave financial hardship and unfairness because when a married person dies without a will, the surviving husband or wife gets the personal chattels and the first pounds 75,000 of the estate. In low house-price areas of the country this will not present a problem as the value of the house will be covered.

The financial limits mean a widow in Grimsby has a good chance of inheriting the couple's home even if it was in her husband's name alone. But a widow in Surrey does not. She may have to sell the house in order to pay the children.

After the first pounds 75,000 the rest of the estate is divided into two equal parts: half goes to the children equally, and the other half provides the surviving spouse - usually the wife - with a life interest. This means she gets only the income and cannot use the capital.

Gillian Cockburn, of solicitors Cockburns in Surrey, specialists in probate and trust matters, says: 'The general intention of the intestacy laws was to provide the surviving spouse with the matrimonial home but it often does not happen in the high-price areas of the South-east.

'In addition the children on reaching the age of 18 could force a sale of the property if they wish to realise their share. This may leave the widow or widower homeless with insufficient to buy another property.'

However, the Lord Chancellor may take a less radical view and just increase the financial limits.

A change in the law relating to co-habitees must also be on the cards. If you are not married to your partner, you have no automatic right of inheritance on their death. A lifetime friend or companion gets nothing under the intestacy rules.

You can make a claim for a share of the estate under the Inheritance (Provision for Family and Dependants) Act 1975. But you have to prove that you were financially dependent on the deceased. The whole process is costly and time-consuming.

The Lord Chancellor is unlikely to advocate a wholesale reform of the intestacy law and say that cohabitees should be treated as spouses. That would cause far too embarrassing an outcry. Instead he is likely to announce that cohabitees should be able to apply for reasonable financial provision under the 1975 Act without having to prove financial dependence on the deceased.

In the meantime the simple way to avoid the worst problems is for couples to put the home into joint names and to make a will.

(Photograph omitted)

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