“In this world, nothing can be said to be certain, except death and taxes”. This famous extract from Benjamin Franklin’s letter still rings true today, 232 years later. And yet, research undertaken in 2017 showed that only 4 in 10 adults in Britain have made a Will.
It’s likely that the number of individuals contemplating their mortality, and taking action by putting a Will in place, has increased during the pandemic. Lawyers preparing Wills certainly saw increased Will instructions from clients who wanted to ensure that their loved ones were taken care of if the worst were to happen.
Undoubtedly, many people will however remain without a Will - or in legal terms, intestate. The intestacy rules govern what happens to a person’s estate if they die without a valid Will. The question is, do the intestacy rules work for you?
Many people assume that, if they are married, their spouse will inherit their estate. If you are married and have no children, then this is correct. However, where the individual who dies also has children, the spouse is only entitled to receive the deceased’s personal possessions, a fixed amount of £270,000 and 50% of any additional assets. The remaining 50% passes to the deceased’s children. Does this scenario work in your circumstances?
What happens if you have children from a previous relationship and your spouse is living in a house owned in your sole name worth £700,000? Your children will inherit a share of the house, and they may wish for the property to be sold to realise their inheritance.
If your children are under the age of 18, their inheritance will be held in trust until they are adults, which might be problematic even if your spouse is their surviving parent.
Assets that pass to your spouse are free of Inheritance Tax whereas, assets passing to your children will be subject to tax. How would any Inheritance Tax liability be paid? What if the majority of your wealth is, like most people, tied up in a property in which your spouse and children are living?
If you are unmarried, your children will inherit your estate. If a child dies before you, their children (your grandchildren) will inherit in their place. Who looks after the money if a child or grandchild is under 18? Is there anyone that you wouldn’t want to take on this role? For example, your ex-wife and mother of the children, or perhaps your son-in-law who has never been particularly good with money.
If you are unmarried and have no children, your nearest blood relatives will inherit your estate. The order of inheritance is as follows: - parents, siblings then half-siblings (or their children), grandparents, aunts and uncles then half aunts and uncles (or their children). If there are no blood relatives, your estate will pass to the Crown as ownerless property.
Keep in mind that that the intestacy rules only include the deceased’s blood relatives. If your spouse inherits your estate, and then dies intestate themselves, it will be your spouse’s family who inherits the estate, not yours.
Stepchildren do not inherit under the intestacy rules either. If your spouse inherits your estate and also dies intestate, any children you have from a previous relationship would miss out on receiving their inheritance.
Unmarried partners are also excluded from benefitting under the intestacy rules, so your partner would have to bring a claim under the Inheritance (Provisions for Family and Dependants) Act 1975 if those benefitting under intestacy were unwilling, or incapable of making provision for them.
Ultimately, it’s never a good idea to rely on the intestacy rules and, as Richard Branson once said, “sometimes the riskiest decision you can make is to do nothing”.
If you want to protect your estate and ensure that the people or causes you care about benefit after your death, get in touch with one of our legal experts to discuss your specific circumstances.
To arrange a complimentary initial video call/telephone consultation simply call 0800 999 4437 or email email@example.com today.