Reasons to choose Wilson Browne
There is an assumption that when a couple are in either a marriage or a civil partnership and one of them dies the survivor will automatically inherit everything.
This is certainly not the case, and in some cases, can cause severe repercussions within the family.
A statutory legacy is the sum that a surviving spouse/civil partner is entitled to receive when a person dies intestate (without having made a valid Will) leaving surviving children (whether or not those children are over 18).
New legislation recently brought into force by the government has increased that statutory legacy to £322,000 (previously £270,000) and has also amended the provisions applying as to how a person’s estate is distributed, where they die without a Will, which is known as the “Rules of Intestacy”.
These Rules of Intestacy provide a strict structure as to how an estate is to be divided and the provisions will vary depending on whether they were married and had children and if so, how many.
The increased statutory legacy now means that a surviving spouse/civil partner will receive the first £322,000 of the estate. If the estate has a value equal to or less than the statutory legacy then of course the spouse/civil partner will essentially receive everything.
If the estate has a value greater than £322,000 then any value over and above this will be divided as to 50% to the surviving spouse/civil partner and 50% to the children.
It is therefore dangerous to assume that a surviving spouse/civil partner will inherit everything as this is certainly not the case especially where there are children involved. It would only be in cases where there are no children that a surviving spouse/civil partner will then inherit the whole estate.
Although this amount seems fairly substantial in some cases it would probably still be less than the value of the family home if that home happened to be in the sole name of the first to have died, this could leave the surviving spouse/civil partner feeling vulnerable and not having the security of knowing that the family home may not pass to them outright.
Problems can arise where parents and children do not necessarily get on or even perhaps where children have removed themselves from the family environment and are no longer in contact with their parents. There may also be children in the family that are not considered as being able to manage their finances or perhaps a disability may make that difficult for them to do as well.
As far as inheritance tax is concerned having a share of an estate pass to children may not be tax efficient as children do not qualify for any specific exemptions in the same way that a spouse/civil partner would and so potentially there could be an inheritance tax liability on a larger estate. It may also be necessary for a surviving spouse/ civil partner to have to make a claim against the estate for additional financial provision which in itself can be quite a costly and lengthy exercise.
For peace of mind, it is therefore extremely important to consider having a Will in place so that a person’s estate can pass to their intended beneficiary in whatever manner is appropriate and certainly never to rely on the Rules of Intestacy.