A subject that many people understandably prefer to avoid thinking about is what happens to their property, money and belongings when they die. This could explain why over half of adults in the UK don’t currently have a will in place.
But what are the repercussions of this? You may think that your estate will automatically pass to your loved ones but, sadly, that isn’t always the case. Here, we’ll explain what happens if you die and don’t have a will in place.
What happens if you die and don’t have a will in place?
If you die without a will in England or Wales, you die intestate. This means that the rules of intestacy apply, determining who inherits your money, property and other possessions. Regardless of your personal relationships and wishes as to who your assets should be passed to, the rules dictate how your estate is handled, depending on your marital status and family structure.
Spouses and civil partners are usually favoured under the rules of intestacy and then children. Unmarried partners aren’t automatically entitled to inherit anything. This means that your loved ones may not be provided for as you’d hoped. Conflicts may also arise between family members who disagree with how your estate is divided.
Married and civil partners
A surviving spouse, including one who is separated but still married to you when you pass away, or a civil partner, will inherit everything if you don’t have any children.
If you have children, your spouse or civil partner will inherit the first £322,000 of your estate, which is known as a statutory legacy. This ensures that your partner is financially protected before the rest of your estate is distributed. They will also receive all of your personal belongings.
If your estate is larger than the statutory legacy, the remainder will then be divided in half between your spouse and your children. The half that goes to your children will be equally divided among them. Under intestacy rules, biological and legally adopted children are entitled to inherit but stepchildren are not, unless they have been legally adopted.
Unmarried or not in a civil partnership
Regardless of how long you’ve lived together or whether you have children, an unmarried partner or one who is not in a civil partnership with you is not entitled to inherit your estate.
Instead, if you have children, they will inherit everything, with your estate being divided equally between them. If you have a child who is under 18, their inheritance will be held in a trust until they become 18 years old.
If you don’t have any children, the order of entitlement for your estate falls to your:
- Parents
- Full siblings
- Half-siblings
- Grandparents
- Uncles and aunts (blood relatives), then their children
- Half-uncles and half-aunts, then their children
No living relatives
If you don’t have any living relatives, your entire estate will pass to the Crown. This is known as ‘bona vacantia’. At this point, your estate will be handled by the Treasury Solicitor.
This highlights the importance of writing a will. Without one, an unmarried partner, a stepchild who you haven’t legally adopted, a friend, a carer or a charity you support won’t receive any benefit at all from your estate. By having a will in place, you can ensure that they’re considered after you’ve passed away.
The benefits of writing a will
As you can see, intestacy rules are unlikely to meet your wishes for who you’d like to inherit your estate, depending on your situation. A will, however, puts you in control and gives you peace of mind that your loved ones are looked after. Having a will in place means that:
- Your estate is handled as you wish it to be.
- You choose who your beneficiaries are and how your assets are to be shared.
- Your loved ones can have financial security when you’re no longer around.
- You can specify who you’d like to be a legal guardian for your children aged under 18 or for vulnerable dependents.
- Funds can be allocated and a caregiver named for the ongoing care of your pets.
- You choose who you prefer to be the executor of your will.
- You can structure your estate to minimise inheritance tax liabilities.
- The likelihood of family disputes over your estate is reduced.
- The preferences for your funeral can be outlined so that your loved ones don’t need to worry about that at an already emotional time.
- You can leave gifts to charities.
Protect your loved ones by writing a will
There are different types of wills to consider and our protection consultants are here to discuss your circumstances and determine the most suitable type for you. You may, for example, have similar wishes to your partner and both wish to have mirror wills. You may have different wishes from your partner or are not in a relationship, making a single will the better choice. Or you may be looking for enhanced asset protection and flexibility with a trust will.
Whatever your preferences, our specialists can clearly guide you on your options, ensuring your estate planning needs are covered. Just give us a call on 01322 907 000 for expert advice on making a will and ways you can help mitigate inheritance tax. Our protection consultants can prepare a will on your behalf, using their expertise to make the process as easy as possible for you, no matter how complex your situation.