Dying without a Will means the distribution of a person’s estate becomes subject to the statutory intestacy rules, which can lead to some unexpected and unfortunate consequences.

If you want to be sure your wishes will be met after you die, then it’s vital to have a Will.

A Will is the only way to make sure your savings and possessions forming an estate go to the people and causes that you care about. Unmarried partners, including same-sex couples who don’t have a registered civil partnership, have no right to inherit if there is no Will. Another of the main reasons for drawing up a Will is to mitigate a potential Inheritance Tax liability.

The beneficiaries of the deceased person that they want to benefit from their estate may be disinherited or left with a substantially smaller proportion of the estate than intended. Making a Will is the only way for an individual to indicate whom they want to benefit from their estate. Failure to take action could compromise the long-term financial security of the family.

These are some of the main areas to consider:

1) What Happens If I Don’t Have A Will?

If you die without a Will or your Will is invalid, then, by law, your estate would be distributed in accordances with the ‘rules of intestacy’.

Even if you have a valid Will, if it is poorly drafted or out of date, your estate may still be wholly or partially intestate.

This diagram explains how the rules of intestacy work in England and Wales.

Intestacy Rules Flowchart - What Happens If I Don't Have A Will?

You may be in for some surprises.

For example, if you are married with children, then your spouse does not inherit everything automatically, he or she would only receive the first £270,000 and half of the remainder with the other half going to the children. In some circumstances this could mean that the marital home would have to be sold to pay the children’s inheritance. If you are not married or in a civil partnership, then your partner receives nothing and your estate could even go to some distant cousin you’ve never even met!

Even if you have no close family, surely you’d prefer to leave your estate to a friend, relative or charity rather than letting the Crown take it all.

Implications Summary

  • Assets people expected to pass entirely to their spouse or registered civil partner may have to be shared with children

  • An unmarried partner doesn’t automatically inherit anything and may need to go to court to claim for a share of the deceased’s assets

  • A spouse or registered civil partner from whom a person is separated, but not divorced, still has rights to inherit from them

  • Friends, charities and other organisations the person may have wanted to support will not receive anything

  • If the deceased person has no close family, more distant relatives may inherit

  • If the deceased person has no surviving relatives at all, their property and possessions may go to the Crown

2) Unmarried Partners Have No Right To Inherit Under The Intestacy Rules

Without a Will, relatives who inherit under the law will usually be expected to be the executors of your estate. They might not be the best people to perform this role. Making a Will lets the person decide the people who should take on this task.

Where a Will has been made, it’s important to regularly review it to take account of changing circumstances.

Unmarried partners have no right to inherit under the intestacy rules, and neither do stepchildren who haven’t been legally adopted by their step-parent.

Given today’s complicated and changing family arrangements, Wills are often the only means of ensuring legacies for children of earlier relationships.

3) Before Making A Will, A Person Needs To Consider

  • Who will carry out the instructions in the Will (the executor/s)

  • Nominate guardians to look after children if the person dies before they are aged 18

  • Make sure people the person cares about are provided for

  • What gifts are to be left for family and friends, and decide how much they should receive

  • What provision should be taken to minimise any Inheritance Tax that might be due on the person’s death

4) Preparing A Will

Before preparing a Will, a person needs to think about what possessions they are likely to have when they die, including properties, money, investments and even animals. Before an estate is distributed among beneficiaries, all debts and the funeral expenses must be paid.

When a person has a joint bank account, the money passes automatically to the other account holder, and they can’t leave it to someone else.

5) Estate Assets May Include

  • A home and any other properties owned

  • Savings in bank and building society accounts n Insurance, such as life assurance or an endowment policy

  • Pension funds that include a lump sum payment on death

  • National Savings, such as premium bonds

  • Investments such as stocks and shares, investment trusts, Individual Savings Accounts

  • Motor vehicles n Jewellery, antiques and other personal belongings n Furniture and household contents

6) Liabilities May Include

  • Mortgage

  • Credit Card Balance

  • Bank Overdraft

  • Loans

  • Equity Release

7) Jointly Owned Property And Possessions

There are two ways that a person can own something jointly with someone else:

Tenants in common

Each person has their own distinct shares of the asset, which do not have to be equal. They can say in their Will who will inherit their share.

Joint tenants

Individuals jointly own the asset so, if they die, the remaining owner(s) automatically inherits their share. A person cannot use their Will to leave their share to someone else.

8) Dying Without A Will Is Not The Only Situation In Which Intestacy Rules Can Apply

It can sometimes happen even when there is a Will, for example, when the Will is not valid, or when it is valid but the beneficiaries die before the testator (the person making the Will).

Intestacy can also arise when there is a valid Will but some of the testator’s (person who has made a Will or given a legacy) assets were not disposed of by the Will. This is called a ‘partial intestacy’. Intestacy therefore arises in all cases where a deceased person has failed to dispose of some or all of his or her assets by Will.

This emphasises the importance of firstly making a will and secondly, reviewing it when your circumstances change.

To speak to an experienced Cardiff-based Estate Planning Adviser contact Tony Thomas on 07585 592494 or tony@wealthmasters.co.uk

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