I am constantly surprised by who doesn’t have a will. However, the surprise works both ways because those who haven’t made a will are usually amazed to learn from me how the intestacy rules will operate on their death if they don’t make one.
Time for a quick refresher, then, on some of the more challenging aspects of the UK’s intestacy rules. These rules can apply to English domiciled individuals in respect of all their assets or non UK domiciled individuals in respect of their UK real estate:
·
If you die married with children, your spouse
may not inherit everything. Your spouse
may only have full control over your personal chattels and £250,000 of your
wealth.
·
If you die married without children, it’s the
same as above but your spouse has control over just £450,000. Your parents may well inherit at least some
of your estate. (However, this is
changing as of 1 October 2014, courtesy of the Inheritance and Trustees’ Powers
Act 2014, so that your spouse will now inherit everything in this situation.)
·
If not all your assets pass to your spouse on
death, there could be Inheritance Tax to pay on your death and, depending upon
the value of your estate, it could be substantial. This downside is often overlooked.
·
Your spouse may have to sue your estate for
reasonable financial provision.
·
Unmarried life partners/cohabitees receive absolutely
nothing under the intestacy rules. If
you want to look after them, you have to make a will. Otherwise they will also have to sue your
estate for financial provision but will have to show need for maintenance.
In practice, the harshness of the intestacy rules is often
softened because jointly owned assets, such as the matrimonial home, usually pass
automatically to the surviving spouse/partner as a result of the law of survivorship
and therefore the intestacy rules do not bite on them. However, it’s not a great idea to rely on it
as there can be evidential difficulties.
Also, dying without a will means that no one is in charge of the assets
from the moment of death – a ‘rudderless estate’ ensues until an administrator
is appointed by the Probate Registry but that can take a little while. This can prove very traumatic for families at
what is already a very difficult time – who wants to hand their family that kind of problem?n contrast, dying with a will naming an executor means that someone is in charge the moment that death occurs. As well as bringing certainty of direction at a difficult time, this can prove immensely useful when it comes to managing certain assets such as family company shares or investment portfolios, which cannot be left to drift until the grant is obtained several months later.
Put simply: if you love someone enough to want to leave them assets, please make a will.
