Where a person dies without leaving a valid Will, their estate (that is, everything they own or have an interest in) has to be divided in accordance with legislation known as the Intestacy Rules. These rules determine who inherits what based on family connections.
Broadly speaking, if you die without a valid Will, under the Intestacy Rules your estate will be distributed to your family members in a set order depending on which family members have survived you. This is, of course, very restrictive and does not take into account individuals’ particular circumstances or who they would like to benefit. An example of this is someone who owns a farm or business who wants to devolve this in a particular way, perhaps to someone who assists in the running of that farm or business who may not automatically inherit this under the Intestacy Rules.
The flowchart in this article sets out the order of the Intestacy Rules in greater detail but common scenarios are as follows:
- The spouse or civil partner receives the whole of the deceased’s estate outright where the deceased has no surviving children; or
- Where the deceased leaves a surviving spouse or civil partner and children, the spouse or civil partner receives all of their personal items, a fixed value of money known as the ‘statutory legacy’ and half of the residue (anything remaining after personal chattels and the ‘statutory legacy’). The children receive the other half of the residue equally between them.
The statutory legacy has been fixed at the first £250,000 of the estate since October 2014, however, the Government promised to review and update this every 5 years. Accordingly, from 6 February 2020 onwards, the statutory legacy for surviving spouses and civil partners will increase from £250,000 to £270,000.
Do I still need a Will?
This increase is, of course, positive news for surviving spouses and civil partners. However, this change has prompted many people to put Wills in place as they have been reminded or become aware of the fact that the Intestacy Rules are very prescriptive because only certain people are able to benefit under them.
The Intestacy Rules do not take into account the nature and closeness of your relationships, who is most in need or who depends on you and to what extent. They do not, for example, provide any opportunity for unmarried partners, stepchildren, foster children or friends to benefit from your estate unless you explicitly provide for them in your Will. This can be particularly problematic in second marriage situations or where the deceased has estranged children and could mean that your estate ends up passing to a distant relative or estranged family memberinstead of those you would have wanted to benefit.
Putting a Will in place puts you in control and allows you to benefit whoever you want, however you want. A Will that is regularly updated (we suggest every 3 to 5 years or as and when your circumstances change) is the best way to ensure that your wishes are carried out and that you have given adequate consideration to your family and financial circumstances, tax and succession planning. It can also prevent any additional stress and hardship for your friends, family members and loved ones when you pass away.
If you have any queries or would like further details in relation to this topic or you would like to make an appointment to discuss updating your Will, or putting a Will in place, please feel free to contact us on 0330 0947777.
By Hester Mills and Jade Cummings