Why making a Will matters

I recently spoke with Raymond James (Fulham), about the importance of making a Will and what happens if someone dies without one. Many people put off making a Will as they assume their assets will automatically pass to the people they would want to inherit it. Unfortunately that is not always the case. With Raymond James I explain why having an up-to-date Will matters.

What happens if you pass away without a Will?

People often assume that when you die, everything you own will simply go to the family and friends closest to you. However, this is not necessarily what happens at all. If you die without a valid Will in England and Wales, you will have had no say over who receives your estate. Instead, your assets will be divided according to what are called the ‘intestacy rules’. This can potentially cause a significant amount of confusion and stress for your friends and family when you pass away.

Who inherits if there is no Will?

Which person(s) inherits your assets will depend on your family circumstances and the value of your estate, according to the intestacy rules.

If you are married or in a civil partnership and have no children, your spouse or civil partner will usually inherit everything. If you have children, your spouse or civil partner will receive your personal possessions, a fixed statutory amount (currently £322,000) and half of anything that is left over. The children share the other half equally. If the estate is worth no more than £322,000, the spouse or civil partner will inherit it all.

A common misunderstanding is that an unmarried partner will automatically inherit if a couple has lived together for several years. This is not currently the case. The Government is considering whether to extend the intestacy rules to a partner who has been living with the deceased person, but this may well not become law. At the moment, if you are not married or in a civil partnership, your partner receives nothing under the intestacy rules.

What happens if your spouse or civil partner has died before you and you have no children?

If there is no surviving spouse, civil partner or child, the estate passes to other relatives in a fixed order. This starts with parents, followed by brothers and sisters and their descendants, half-brothers and half-sisters and their descendants, grandparents, and then uncles and aunts and their descendants. If no eligible relative can be found, the estate could eventually pass to the Crown (i.e. the Government).

Note that the rules do not automatically provide for friends, stepchildren who have not been legally adopted, carers or charities. If you want to leave something to any of them, you will need to say so in a Will.

What happens to jointly owned property?

The intestacy rules do not necessarily apply to everything a person owned. A property held jointly as ‘joint tenants’ will pass automatically to the surviving joint owner. Some pension benefits and life assurance policies might also be paid directly to a nominated person or under the rules of the relevant scheme. The deceased’s share of a property held as ‘tenants in common’ will normally form part of their estate.

Who acts as executors in an intestacy?

Where there is no Will, there will have been no executors chosen by the deceased. Someone entitled under the intestacy rules will usually need to apply for what are called ‘letters of administration’, so that they have the legal authority to handle the estate. This can cause a lot of difficulty for your family members, particularly if they disagree about who should take responsibility.

Can the intestacy rules be challenged?

The intestacy rules cannot be ignored just because the outcome appears unfair to your family and friends. However, in certain situations it could be possible to make a claim against the estate.

For example, a spouse, civil partner, cohabiting partner, child or someone who was financially dependent on the person who died might be able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975. There are strict time limits, so anyone considering a claim should take legal advice as soon as possible. It would also be a lengthy, costly and stressful process.

The people who inherit can also sometimes agree to change the way the estate is divided by entering into what is called a Deed of Variation. This is generally done within two years of the death.

It is definitely the case that making a Will in the first place is far simpler and less expensive.

What happens to a child if both parents die without Wills?

There are two main concerns if both parents of a young child were to die: who will look after the child and who will manage the money they inherit.

If the parents have not appointed a guardian in their Wills, there could be uncertainty about who should care for the child. A close relative does not automatically become the child’s legal guardian. If the family cannot agree on suitable arrangements, the Family Court may need to decide where the child should live, based on what is in the child’s best interests.

The child will normally still be entitled to inherit from their parents’ estates. As a child under 18 cannot usually manage an inheritance personally, the money will be held by trustees until they reach 18. The trustees can generally use appropriate amounts for the child’s maintenance, education and general benefit in the meantime.

The difficulty is that the parents will not have chosen those trustees or given any guidance about how they would like the money to be managed. The child will also usually become entitled to the inheritance at 18, which may be earlier than the parents would have chosen and 18 is certainly a young age at which to inherit a potentially large amount.

Does it make a difference if the parents were unmarried or divorced?

If parents are unmarried the surviving partner will not automatically inherit from the other partner’s estate. Their children might inherit instead. This can create real financial problems, particularly if the family home or most of the couple’s assets are held in the deceased partner’s sole name.

If the parents were divorced, a former spouse will not normally inherit under the intestacy rules, but the children will remain entitled to inherit. The surviving parent may also continue to have parental responsibility.

How can a solicitor help?

It is crucial to put clear legal arrangements in place rather than leaving it to be dealt with after your death.

As a Wills and Probate solicitor, I can help you prepare a Will that reflects your wishes and your particular family circumstances. This includes choosing who should administer your estate, appointing guardians for young children and deciding who should look after any money they inherit. You can contact me for a complimentary conversation regarding your situation.

A Will can also allow you to delay the age at which a child receives their inheritance and to create suitable trusts where more protection or flexibility is needed.

It is sensible to consider your Will as part of your wider financial plan. I can work together with your financial professionals, such as the team at Raymond James, Fulham, to look at how your Will fits into your wider financial situation.

Making a Will is not only about deciding who gets what. It gives the people closest to you some certainty, makes your wishes clear and can save your family from having to make difficult and potentially stressful decisions at an already very busy and emotional time.