Could your family pay the price if you die intestate?
Date: 7 May 2015
If you die intestate (without a will) there are certain rules about how your estate should be treated. On 1 October 2014 these rules were changed and if you don’t have a will in place this could jeopardise the inheritance itself as well as potentially give rise to an unexpected tax bill, depending on the structure of the property ownership.
If your property is owned under a ‘beneficial joint tenancy’ it will pass, in its entirety, to your surviving spouse, civil partner or legal joint owner.
However ‘tenants in common’ ownership, which allows each share to be bequeathed separately, means that your share will not necessarily pass to the survivor.
Personal property (also known as chattels) and other considerations such as furniture, household items, vehicles and art will automatically pass to your spouse or civil partner, but if you remain unmarried they will bypass your cohabitee and follow the laws of intestacy.
If you want control over who benefits from your estate then it is vital that you have a will in place, clearly stating your wishes. Without this the decision will be made under the laws of intestacy and could bypass your nearest and dearest, generally favouring family bloodlines however far removed. This could leave your loved ones entirely unsupported at an already sad and difficult time.
There are three main scenarios for those who die intestate based on marriage status and whether there are children or not.
A married couple with no children
If you are married but there are no children everything in the estate currently goes to your spouse or civil partner. Before 1 October 2014 the first £450,000 went to your spouse and the rest was split between your spouse, parents and any siblings.
A married couple with children
If you are married with children your surviving spouse or civil partner will be given priority over the children. Before 1 October 2014 the first £250,000 was given to your surviving spouse and the rest split between children and spouse.
An unmarried couple
Without a will, your cohabitee is not entitled to anything that isn’t protected by a ‘beneficial joint tenancy’ agreement. Everything else will go to children or grandchildren if you have them. If you don’t have children then everything goes to your own parents or siblings. In the event you have no ‘blood’ family then your estate will go to the Crown.
Having a will not only means you get to decide who you want to inherit your property but it also helps you plan the most effective distribution for inheritance tax purposes. Careful planning is essential to maximise the benefits for your surviving family members.
For more information on the aspects of lifetime planning discussed here, please contact Murray Graham on 01603 663300.