Don’t die Intestate
Did you know that about 2 in 3 of us adults fail to make a will and we therefore die intestate, (or without a Will).
Even those who do make a Will may still be caught by the rules of intestacy. A Will may prove to be invalid because of a procedural issue or even just because no-one can find the will. A subsequent marriage often revokes a Will while a divorce can alter the terms of a Will.
Why have a will?
The main advantages of having a Will are:
- Your property transfers according to your wishes
- You may make arrangements to avoid or reduce inheritance tax
- You can choose who you want to administer your estate
- You can create a trust, e.g. to provide for dependants when simply leaving them money or property is not deemed appropriate
- You can create a trust or make other arrangements to reduce your estate and protect yourself for health care charges in older age
- An administrator has to be appointed instead of an executor. This can be a slower process, and the appointment may be challenged
- You may specify you wish to look after any [under-age] childre
- You can decide what type of funeral you wish (such as cremation or burial).
All these planning advantages are lost without a Will.
Without a Will you are allowing the state to decide what happens to your estate and in this case your property may not devolve as you would wish. In particular, a surviving spouse or civil partner will not automatically receive everything. Also a partner with whom you live but where there is no marriage or civil partnership will not receive anything under the rules of intestacy.
Also under the rules of intestacy, step children are not recognised only blood children or legally adopted children. Even gifts that you may wish to make to friends or charities will not be made as they are not recognised under intestacy rules.
Here’s an example of what could happen if you die without a Will
An individual marries for the second time and lives together with their new partner. The individual has grown up children from a previous marriage.
The individual dies without making a Will and leaves an estate worth £1,050,000 made up of:
Principal residence: £750,00 (owned completely by the deceased)
Chattels e.g. jewelry, car etc: £50,000
Under the Intestacy rules, the deceased’s spouse would receive all of the chattels plus a statutory legacy equal to £250,000 plus a ‘life interest’ in half of the residuary estate in this case made up entirely of the house i.e. they get to have the benefit of the asset until they die!!
The deceased’s children would receive half of the residuary estate £375,000 which would be distributed equally among them. In this instance the residuary estate is made up entirely of property it will therefore prove difficult to facilitate this and a family home will often need to be sold as a result.
The deceased’s children would also receive the other half of the residuary estate upon the death of the surviving spouse. This is a best case scenario, but often partners who are not legally married will own a house as’ beneficial joint tenant’s or as ‘tenants in common’, and often this can be worse for the deceased children under intestacy laws.
The solution is very simple a Will ensures your wishes are carried out exactly and they have the added advantage of helping with tax planning.
We have a new business guide on intestacy rules, why not download it for free now
We are very happy to help you look at your wills and inheritance tax planning issues so please contact Jason Thomas on 0845 3651000 or email email@example.com for your free meeting.