Who will benefit from your estate?

26 March 2010

If you die without a Will in place then everything you leave will be divided according to the fixed rules of intestacy.  This can have some unexpected consequences.  For example, without a Will your surviving spouse (which definition includes a civil partner) may only receive part of your estate.  

If you have children then your spouse will receive all of your personal belongings, any assets owned as joint tenants (for example jointly held investments or bank accounts) and a lump sum of £325,000.  Everything else will be divided into two equal shares with your spouse receiving the right to income from one half (with the capital eventually passing to your children) and with the other half automatically passing to your children upon them reaching the age of 18.  This can leave your surviving spouse in an extremely vulnerable position, lead to an upfront inheritance tax liability and lead to your children receiving lump sums when they are not mature enough to deal with them.

If you do not have children then the situation is slightly improved in that the surviving spouse receives £450,000 and half of the balance outright (instead of on trust) but the other half will pass to more distant relatives ie your parents or siblings.

The situation is worse still if you live with a partner but you are not married or in a recognised civil partnership.  Your partner will only receive assets that are owned as joint tenants.  Everything else will pass to your more distant relatives in a set order.  Your partner may be able to make a Court claim for extra funds but this is an expensive and time consuming route.  

The intestacy rules also dictate who will deal with your affairs following your death, which can mean that a relative who is totally unsuitable for the task is dealing with your financial affairs.

To avoid all of these, and other, potential problems we would suggest that you seek professional help to draw up a Will.  This will also enable you to undertake inheritance tax planning, which could significantly reduce any inheritance tax liability that would otherwise be due as a result of your death.

For more information on this subject or any other legal matter,
please contact us:

Tonbridge: 01732 770660
Sevenoaks: 01732 747900
Email: marketing@warners-solicitors.co.uk