It was recently estimated that over 54% of adults in the UK do not have a will, a total that amounts to around 5.4 million adults. Further research also suggests that 60% of parents do not currently have a will.
Most of these people are unaware that failing to have a will can be complicated, and even disastrous for the loved ones they may leave behind. Director of Compass, Kerry Lawrance explains the implications of not having a will, and how the rules of ‘intestacy law’ will determine who receives the estate…
A death without a will, (known as dying intestate), means that the distribution of your estate is determined by the rules of intestacy. Unfortunately, these rules can often mean that an estate is not distributed how the deceased person would wish.
Dying without a will also makes distribution of an estate a great deal more complicated, and even if you were happy with the way that intestacy rules would divide the estate, having a will would still reduce many complications and significantly speed up the probate process. It would also make issues such as funeral costs and inheritance tax a lot simpler.
How ‘intestacy law’ works
Intestacy law generally means that everything owned at the time of death is distributed according to a rigid set of rules. This generally works as follows.
- If you are married without children, the rules state that your spouse (or civil partner) receives everything. It is important to also remember that spouses and partners who are separated but not divorced can also inherit under the rules of intestacy.
- If you are married and do have children, then your spouse will receive up to the value of £250,000 of the estate and then half of the remaining estate, (the other half is then divided equally amongst the surviving children).
- If you are not married (but have children), then the children share everything equally.
- If you are not married and do not have any children then the estate will be shared equally, (in order of priority) to:
- Siblings, (the children of siblings if siblings have deceased)
- Uncles and aunts.
Living with a partner
If you are living with a partner that you are not married to, or in a civil partnership with, and you were to die intestate, the rules would dictate that your partner receives nothing at all, even if you have lived together for many years. This is considered to be one of the most hazardous areas of dying intestate. Similarly, if you are unmarried, and your partner’s children are not biologically yours, (or been adopted by yourself), they will not be entitled to any of the estate.
It’s worth remembering that dying intestate can result in a large inheritance tax bill. Under intestacy rules, if you married, and you were to leave behind a spouse and children, the first £250,000 will be distributed to your spouse and half the remainder, to your children. Whilst your spouse is exempt from paying tax, your children could be left with a significant inheritance tax bill.
There are of course, many people that aren’t married, who have no close family members or dependents, and therefore cannot see any point to having a will. However, in this case, when no family can be found, the Crown inherits all assets- also known as ‘bona vacantia’ – (meaning ‘vacant goods’).
In such cases, having a will allows a person to expand on where their money goes, and offers the freedom to leave an estate to close friends- or even to a charity or a good cause that is close to a person’s heart.
Compass now offers a full will writing service. If you are interested in learning more - or would simply like to ask us a question, please feel free to call us on: 01329 844145.
Address: Venture House, The Tanneries, East Street, Titchfield, Hampshire PO14 4AR