Changes in who inherits if you do not make a will
9th Sep 2016
If someone dies without leaving a Will, the Rules of Intestacy govern what happens to their estate. On 1 October 2014, changes were made to these rules making it even more important for people to ensure they have a valid Will.
Further, it was envisaged that the reforms would make significant changes to the law relating to cohabitees. This has not happened and the notion of a “common law spouse” does not exist, regardless of how long the couple have been living together. The Law of Intestacy does not give any rights for unmarried couples who are living together to inherit their partner’s estate on death. In this scenario, the cohabitees are treated as single individuals and the deceased’s estate passes to blood relatives, with any children being first in line. The partner receives nothing.
Under the old rules, if a spouse died intestate with no children, the surviving spouse would receive a statutory legacy of £450,000 plus half of the residue. The remaining half would go to the deceased’s parents or if there were no surviving parents, to siblings. Under the new rules, the spouse receives the whole estate.
For those couples with children, the old rules gave the surviving spouse a statutory legacy of £250,000 and a life interest in half of the residue with the remaining half to children at the age of 18. Under the new rules, the surviving spouse receives the same statutory legacy of £250,000 but is entitled to half of the estate outright with the remaining half to children at the age of 18.
Parents in particular are encouraged to make a Will to state who legal guardianship of their children should pass to in the event of their death. There is nothing in the Intestacy Rules regarding guardians and it is vital that desires are made clear in a Will to ensure that children are raised by the person or people the parents would have chosen.
Planning ahead can also maximise benefits from Inheritance Tax (IHT) reliefs and exemptions. By giving proper consideration to estate planning when making a Will, the estate can be managed in a tax efficient way so as to minimise IHT liability on death.
Making a Will is so much more straightforward than people imagine, yet it is the one thing that is commonly overlooked. Even if you do not have a large estate it is still important to make a Will, if only to ensure that someone is appointed as Executor and given powers to administer your estate.
Contact Pamela Wilson or Rebecca Blundell in our Wills and Probate department today to book an appointment for complete piece of mind and ensure your loved ones are provided for:
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