By Elena Tzialli
"I don't need a Will, my spouse gets everything anyway"
"I don't need a Will because I'm not worth anything"
These are two very common misconceptions
Many people think that Wills are only necessary for people with a great deal of wealth, but this is not the case. There are certain laws governing how a person's estate is divided if they die 'intestate' (i.e. without a Will), which might not be what you would expect or intend.
The intestacy rules determine who inherits your assets. The intestacy rules do not allow for you or your family to choose who receives your estate, which is distributed in accordance with the strict legal rules.
According to statistics, one in three people die intestate in the UK every year.
What happens if you are married or in a civil partnership without children?
If you die intestate, and are married or in a civil partnership without children (for deaths after 1 October 2014), your spouse or civil partner will receive your entire estate.
Assets that are owned jointly as joint tenants are outside the scope of the intestacy rules and will pass automatically to the surviving joint owner, whoever this may be.
What happens if you are married or in a civil partnership with children?
If you have children, £250,000 will pass to your spouse or civil partner. The remainder is then divided in half with one half passing to your spouse or civil partner and the other half being divided between your children.
Whilst the above figures may sound quite high for your spouse or civil partner, it may be a poor reflection of the total value of your estate and your spouse or civil partner could miss out on necessary funds.
What happens if you are not married or in a civil partnership?
If you die without a Will, any unmarried partner would receive nothing under the intestacy rules. Your estate will pass to any children you have.
If you have no children your estate will pass to your parents then siblings. If there are no close relatives, then your entire estate could pass to the Crown.
Ensure your Will is up to date
You may think you have a valid Will but below are two situations when your estate is still subject to the intestacy rules:
If your Will does not dispose of some assets, (for example, because a named residuary beneficiary has predeceased you), then there will be a partial intestacy. That part of your estate not disposed of will be distributed in accordance with the intestacy rules.
Your marriage or civil partnership automatically revokes a pre-existing Will. If you die without having made a new Will following your marriage or civil partnership then your estate will be subject to the intestacy rules.
Both the examples above show how important it is to review your Will regularly, particularly if your circumstances change.
In summary, you should make a Will because:
The intestacy rules do not allow you to choose who receives your assets;
The intestacy rules do not provide for your spouse or civil partner to inherit the whole of your estate;
In your Will you can provide for more complex family relationships, such as stepchildren;
You can provide for gifts to other relatives, friends or charities;
You can ensure that your Will is tax efficient for Inheritance Tax purposes;
If you are unmarried you can provide for your partner who may otherwise be forced to make a claim against your estate for reasonable financial provision; and
If you have children, you can appoint a Guardian to care for them.
Preparing a Will is an important step to take in securing the future for your loved ones and is something you should not delay.
For more information about this article and how the Private Client team can help protect the interests of you and your family, please contact Elena Tzialli.