Getting Around to it: Can you Afford Not to Make a Will?
Did you know that 40% of us leave no legally valid will?
There is a common misconception that if you don’t have a will in place when you pass away then your money will go straight to your partner or child; unfortunately, it is not that straightforward.
What happens if I don’t have a will?
Intestacy Rules were created in the Victorian era to deal with splitting estates where there was no will in place. When a person passes away without a will they are referred to by the state as dying intestate. The rules of intestacy will also be applied to people who have made a will that is not deemed to be legally valid, for example if it is unclear or not witnessed.
How will my estate be split?
The rules of intestacy state that only current married/civil partners and close relatives can inherit. Divorced parties or civil partnerships which have legally ended are unable to inherit under intestacy rules, however if the marriage/partnerships had not been legally finalised then the separated party will still be able to inherit.
Will my children receive any inheritance if I don’t have a will?
If the deceased’s estate is valued at £250,00 or over and has surviving children, grandchildren or great children then their estate will be split so that the surviving partner inherits:
- all the personal property and belongings of the deceased
- the first £250,000 of the estate
- half of the remaining estate.
The remaining half of the estate will be split equally between any children, if the children are under 18 their share will be held in trust. Grandchildren and great grandchildren will only be able to inherit if both their parent and grandparents have passed away.
In instances where there is no married or civil partner remaining the inheritance can be split equally between children.
Can any of my other relatives inherit my estate?
Another scenario taken into account by intestacy rules is if there is no married/civil partner, children or grandchildren surviving the deceased, then their parents or siblings will be the next eligible parties to inherit the estate.
If the deceased does not have surviving married/civil partner, children, grandchildren, great children, parents, siblings then the order of eligibility for inheritance will be:
- grandparents
- aunts & uncles (cousins are able to inherit here if the aunt/uncle have passed away before the intestate person)
- half-aunts & half-uncles (half-cousins are able to inherit here if the half-aunt/half-uncle have passed away before the intestate person)
I’m not married but I live with my partner, can they inherit my estate?
Cohabiting couples, who make up 9.8% of the population, are not recognised under intestacy rules. So even if a couple have been cohabiting with their partner for 20 years the surviving partner would not legally be entitled to the deceased partners estate.
This can cause many problems especially if the deceased has surviving children from a previous relationship, as they will be entitled to a percentage of the deceased’s estate, if the estate is valued over £250,000. In some cases, this can result in the surviving partner having to sell the property so as the child of their partner can receive their share of the inheritance.
If I have no surviving family can my estate be inherited by a friend?
Under intestacy rules if there are no surviving relatives then the deceased’s estate will be left to the Crown, this is known as ‘bona vacantia’.
Unmarried partners, friends, relatives by marriage and carers are not eligible to inherit the estate.
Are there any alternatives to a will?
The only other way in which to arrange for an estate to be shared out differently is by making a deed of family arrangement or variation; for this to be valid all the people who would inherit under the rules of intestacy must agree.
For example, a deed of family arrangement or variation may be where parents inheriting from grandparents, agree to the money going to their children.
It is important to note that the deed of family arrangement or variation must be made within two years of death.
Do I need a will?
Although it is not a legal requirement to write a will, it does ensure that the estate is divided according to the wishes of the deceased, removing a lot of stress and strain from close family members who are dealing with their own grief. Ultimately, it’s just ‘good housekeeping’ and it can help to lower inheritance tax.
A growing number of people are cohabiting rather than getting married; without a will in place these people will not be entitled to any part of their partner’s estate. A will can secure your partners financial security and ensure that they are able to remain in the home you shared until they chose to move.
Some families lose touch or fall out so you may prefer to leave your estate to friends or even a charity. Ultimately without a will you will have no control as to who your estate is left to.
Other important features of a will include:
- appointing the executors, whom are responsible for carrying out the wishes expressed in the will.
- If you have children under the age of 18 then you can name who you would like to be their guardians in your will.
- Your funeral wishes, whether you wish to be buried or cremated.
How to get a will?
While some people choose to write their own wills, it is important to be aware that without the correct legal procedures being followed there is a risk that a will may be deemed invalid, which would mean that the deceased’s estate would be split according to intestacy rules.
For peace of mind we recommend making a will with a solicitor, as they are experts in this field and will write a legally secure will.
How can a financial adviser help?
Although a financial adviser does not write wills, they can prove to be an incredibly valuable aspect of the will writing process.
A financial adviser can work with the client and their chosen solicitor to put the client’s financial affairs in order; preventing a mess being left for the executors of the will. One of the main benefits a financial adviser can bring to the process is to minimise the inheritance tax liability. At KDW we often are asked by our clients to be part of this process and can, if required, recommend solicitors that specialise in will writing.
If you would like to have a discussion regarding estate planning and making a will then please do not hesitate to contact us:
Tel: 01727 85 22 99
Email: mail@kdw.co.uk
2nd Floor Centurion House, 136-142 London Road, St Albans, AL1 1PQ