Lifetime Planning and Wills specialist, Jenny Greenland, explains what happens to your estate if you die without making a Will.
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Research suggests that around 60% of UK adults have not made a Will.
If you are over 55, you are three times more likely to have made one than somebody aged 18 to 34. But even among those over 55, more than one in three are still without a Will. And if you are among that younger age bracket, where only around one in four has one, you are more likely to have dependents and other significant commitments.
If you die without a Will, inflexible legal rules, known as the intestacy rules, automatically determine how your property, money and other possessions are allocated. There is a good chance this will not have been what you would have chosen to do.
The rules do not make provision for the modern family. The best example of this is the complete lack of provision for your partner unless you are married or in a civil partnership with them. Forget the notion of ‘common law’ spouse – that is total fiction. Put simply, if you die intestate, your partner will not automatically inherit any of your property, money and possessions that are in your sole name. Instead, if they cannot reach agreement with your relatives, they will have to make an inheritance claim on your estate, which may very well be disputed. The legal costs of a claim will be borne by your estate, reducing its value.
In terms of children, the intestacy rules only recognise your biological and adopted children; there is no recognition of step-children. Just as with an unmarried partner, step-children may have to bring an inheritance claim.
Broadly, the intestacy rules work as follows.
- If you were married or in a civil partnership and have no children, the whole of your estate will go to your spouse or civil partner.
- If you were married or in a civil partnership and do have children, the first £270,000 of your estate – referred to as the ‘statutory legacy’ – and all of your personal possessions goes to your spouse or civil partner. Anything over £270,000 is then divided, with your spouse or civil partner receiving 50% and the children – or their direct descendants if they have died before you – dividing the other 50% between them.
- If you were not married or in a civil partnership, but were living with a long term partner, your partner is not be entitled to receive anything.
- If you were not married or in a civil partnership, but you do have children, the whole of your estate goes to them.
- If you were not married or in a civil partnership and do not have children, the intestacy rules determine who should inherit according to a statutory order of priority – parents, siblings, half-siblings, grandparents, uncles and aunts etc. If there are no surviving relatives, your estate passes to the Crown.
Other important considerations about dying intestate
Jointly owned assets, eg a house or bank account, pass to the surviving joint owner, not under the rules of intestacy.
Within your Will, you can appoint guardians to care for any children who are under 18. Without such an express appointment, a dispute may arise among your family.
Making a Will can help to reduce the amount of Inheritance Tax your estate has to pay. This is something we consider with every Wills client.