14 Nov 2017
Author: Stephen Breen
Just 46% of adults in Britain have a Will with more than half of the country leaving things to chance. So what happens to your assets if you don’t make this important legal document? We look at what happens if you die ‘intestate’ and the other compelling reasons why every adult should have a Will in place.
Intestacy – England and Wales
If you die and your estate is ‘intestate’, this means that you didn’t make a Will during your lifetime. In such circumstances, certain rules will apply to your assets.
If you are married or in a civil partnership, your spouse or partner will inherit the first £250,000 of your estate. Anything over £250,000 will be split equally between your spouse/partner and your children. If you have no children, your spouse or civil partner will inherit all of your estate.
If you don’t have a spouse or civil partner, the rules are as follows:
- If you have children, the estate will be divided between them.
- If you don’t have children, your estate will be divided between your parents.
- If your parents have died, the estate will be divided between your brothers and sisters (or if they predeceased you, their heirs).
- The order thereafter is half-brothers or half-sisters (or if they predeceased you, their heirs), grandparents, aunts and uncles (or if they predeceased you, their heirs), and finally half-aunts or half-uncles (or if they predeceased you, their heirs).
Of note, unmarried partners are not entitled to anything under the rules of intestacy – although if they have lived with you for 2 years before your death, they can make a claim under the Inheritance (Provision for Families and Dependents) Act 1975.
Other reasons to make a Will
The rules of intestacy can produce some unexpected results and will certainly provide a good enough reason for many to make a Will. However, there are a number of other reasons why you need to have this important document in place – including:
Minor children: If you have young children you will need to appoint guardians for them in your Will.
Funeral: You may have a preference as to whether you are buried or cremated which should be included in your Will.
Personal possessions: Any specific personal possessions that you want to pass on to certain family members should be recorded in your Will.
Tax planning: With careful planning you can minimise your inheritance tax liability, and that of your partner.
Inheritance protection: If you die and your partner remarries, their new spouse is first in line to inherit the family wealth. You could instead leave your partner a life interest in your share of the family home with the remainder to go to your children.
Divorce protection: If you leave your child a monetary gift in your Will and they then get a divorce, the inheritance may be considered when dividing the marital assets. Certain types of trust can be used to keep the money safe for them.
Creditor protection: If your partner gets into financial trouble after your death, the assets you have left them can be seized to pay their liabilities. Again, certain types of trust can prevent this from happening so that your children’s future inheritance is safe.