Reasons to choose Wilson Browne
Making a Will is the most effective way of ensuring that your estate (money, property and possessions) is distributed according to your wishes following your death. Despite this, more than two-thirds of people in the UK pass away without a Will; in legal terms this is known as dying intestate.
In these cases, the deceased’s estate is distributed according to intestacy law, which determines who the beneficiaries should be and how much each should receive.
We will look at how the intestacy rules apply, their drawbacks and how to ensure your loved ones benefit from your estate in the way you wish.
What are the rules of intestacy?
The principle behind the intestacy rules is that the deceased’s estate should pass to the closest family members possible. In many cases this will mean the individual’s spouse and children in the first instance then onto parents and siblings, but the rules allow assets to pass to more distant family members if necessary.
While intestacy law may be quite straightforward to apply in some cases, the situation can become more complicated where people have remarried, had children with different partners and so on. We recommend obtaining expert legal advice should you have any queries or concerns.
In England and Wales, the laws of intestacy operate in the following way:
- The husband, wife or civil partner of the deceased receives the first £270,000 of the estate. They also receive half of the remainder and all the personal possessions.
- The remaining assets are divided equally between the deceased’s children (including any that have been legally adopted).
- Should the deceased not have been married or in a civil partnership, all of their estate would be divided equally between their children.
- The share of any children who have died will pass to their children (the grandchildren of the deceased).
- In cases where the deceased had no legal partner or children, their entire estate will be shared equally among their parents.
- If there are no surviving parents, the siblings of the deceased will receive equal shares of the estate.
- The share of any sibling who has already died would be shared among their children (the nieces and nephews of the deceased).
- Should the deceased not have had any brothers or sisters, their estate would pass to their half-brothers and half-sisters. Again, the share of anyone who had died would pass to their children.
- If the deceased had no half-siblings, the estate would pass to any living grandparents.
- In cases where there are no surviving grandparents, the estate would pass to any living aunts and uncles of the deceased. Their children (the cousins of the deceased) would inherit if the aunt or uncle was no longer alive.
- Should there be no aunts or uncles, the estate would pass to any half-aunts or uncles. Again, their children would inherit if the half-aunt or half-uncle was no longer alive.
- If there are no surviving members the whole estate would pass to the Crown.
There are separate rules of intestacy for both Scotland and Northern Ireland. While the general principle remains (the estate passing to the closest surviving relatives of the deceased), there are some differences in how this is applied.
For example, in Scotland a surviving spouse or civil partner would receive the first £473,000 of the estate, furniture and moveable household goods worth up to £29,000, up to £50,000 in cash and a third of the rest of the estate, with the remainder being split between the children.
In Northern Ireland, the spouse or civil partner would be given the first £250,000 of the estate, all personal possessions and a third of the rest of the estate (they must outlive the deceased by at least 28 days to be entitled to an inheritance). The children would be entitled to the remaining two-thirds of the estate.
More information about the rules of intestacy (including how they apply in Scotland and Northern Ireland) is available here.
What are the disadvantages of the rules of intestacy?
The intestacy rules provide a way of distributing an estate when the deceased has not left a Will.
Many people view them as far from perfect, however, and no substitute for having a robust, bespoke Will drawn up by an expert as a way of ensuring that your assets are allocated in the way you wished.
We will take a look below at some of the downsides to intestacy law.
Loss of control over assets
By not making a Will an individual effectively gives up control over the way that their money, property and possessions are dispersed after their death. While the rules of intestacy provide a process for sharing out the estate, they take no account of personal feelings and preferences.
The procedure operates on the principle that those who are most closely related to you should receive priority.
Life is often more complex than this and there may be people other than close family members whom you would like to receive a bequest from your estate.
For example, the following would not be able to receive any bequest for your estate under the intestacy rules:
In addition, someone who is a more distant family member may still not receive a bequest due to others being ahead of them in the order of priority.
It may be that an individual sees no need to make a Will as they believe that the rules of intestacy will disperse their estate in the way they wish.
Even if this is true in the present it does not take account of the possibility that both their family circumstances and the size of their estate may change over time with the result that the rules would no longer allocate their assets in the way they wished.
Lack of legal and financial expertise
If an individual is leaving a large and complex estate there may be a considerable amount of inheritance and capital gains tax payable. Such liabilities can significantly affect the value of the subsequent bequests that are payable.
Someone who chooses not to make a Will may be missing out on the valuable advice a solicitor or other professional could have provided in minimising the tax payment.
Likewise, if children are to be among the beneficiaries of an estate, drawing up a Will would have provided an opportunity to set up a trust to secure their inheritance until adulthood.
Stress and anxiety
The distribution of assets from an estate can be a very sensitive issue and has the potential to cause ill feeling within families at what is already an extremely difficult time.
This problem can be exacerbated where there is no Will as it is more difficult to be sure that bequests are being made as the deceased would have wished. People who have received no bequest or a smaller one than they felt they deserved may harbour a sense of injustice.
Such feelings may even lead to a legal challenge over the estate, something that could cause considerable emotional strain on the family and reduce the value of the estate.
Even where there is no dispute over the way an estate is to be dispersed, the lack of a Will can still indirectly cause unnecessary anxiety; in having a Will drawn up an individual will have appointed an executor to carry out the often onerous task of sharing out the assets.
Even if the executor is a friend or relation rather than a solicitor, they will have accepted the responsibility in advance and had time to prepare for it.
Where there is no Will, however, the next of kin may find themselves unexpectedly having to make all the arrangements for the estate to be distributed according to intestacy law while still grieving for the loss of their loved one.
What are the advantages of making a Will?
We have seen how dispersing an estate according to the rules of intestacy can have a number of negative consequences. In this section we will look at the benefits that can result from an individual making a Will.
Whereas intestacy law provides a broad brushstroke approach to distributing a deceased person’s assets, making a Will provides the opportunity for great precision in determining exactly who the beneficiaries will be, and what each will receive.
Bequests, for example, can be made on the basis of the individual’s feelings towards them and their level of need, rather than their family relationship.
As circumstances change over time, so might the way you wish your estate to be distributed. We have seen how the intestacy rules provide a fixed way of making bequests; in contrast, a Will can be ‘future-proofed’ by using precise terms when it is drawn up. In addition, Wilson Brown offers free will health checks at regular periods to help you ensure that the document remains appropriate for your wishes.
Should you choose to ask a solicitor to draw up your Will you have the opportunity to benefit from their knowledge and experience. Issues such as inheritance tax, capital gains tax and overseas investments can be highly complex, and receiving expert advice can ensure that as much of your estate as possible is passed on to your beneficiaries.
Wilson Browne, for example, consults with trusted local accountants where appropriate to ensure that your Will is drawn up in the most financially efficient way.
Peace of mind
A Will provides you and your loved ones with the reassurance that your estate will be distributed exactly in accordance with your wishes which may reduce the risk of family discord.
A solicitor will also be able to ensure the document is robust and fit for purpose, thereby reducing the prospect of a legal challenge.
How can I find out more about intestacy and making a Will?
Solicitors at Wilson Browne have a wealth of experience in all issues relating to intestacy and Wills.
We recognise that these can be sensitive issues and so combine our expert help and guidance with the highest levels of tact and understanding to secure the future of your loved ones.
Our fee for drafting a Will starts at just £295 (plus VAT).
We have offices in Corby, Higham Ferrers & Rushden, Kettering, Leicester, Northampton and Wellingborough, and will also be happy to make home visits for clients with mobility issues.