What Is Intestacy?
When an individual dies without making a Will, they are described as having died intestate, which means that their assets and belongings (estate) will be distributed according to the rules of intestacy.
Currently, only 43% of adults in the UK have a Will. This means there are over 31 million people without a Will who are risking having their estate being left to individuals that they may not have chosen. They are also risking inheritance tax being paid on their death as they cannot control who ultimately gets their estate.
In England and Wales, if you have a surviving spouse or civil partner and child/ren and you do not have a Will, the law states that your spouse receives all of your personal possessions, known as chattels. Your spouse also receives £322,000 and 50% of the balance of the rest of the estate, known as the residue. The child/ren receive the other 50% of the balance of the estate.
If your estate is worth less than £322,000 your spouse or civil partner will receive the whole of your estate and your children will receive nothing. If there is no surviving spouse or civil partner, your child/ren will receive everything. Step children receive nothing, regardless of how long you cared for them unless you have legally adopted them if there is no Will to stipulate they should inherit.
If you die intestate leaving no surviving spouse or civil partner, your estate will be distributed in a strict order from closest blood relatives to furthest. If there are no surviving blood relatives and no valid Will, the estate goes to the Crown which is called ‘Bona Vacantia’.
This is just a brief outline of the rules of intestacy, which is a very complex area. Avoiding the issues that can arise is simple – to protect your estate and ensure your intentions are clear and adhered to, organise your Will today for your peace of mind.
Joining The Dots with a Financial Adviser
There is more to consider around making a Will than people think. In practice, when families begin to consider their Will more holistically, especially with our guidance as later life financial and legal specialists, they are often surprised to discover gaps and inconsistencies in their overall estate plan.
A well-considered Will arrangement usually brings together several areas of financial and legal planning. Wills, Trusts and Lasting Power of Attorney form part of that picture, but so do questions about inheritance tax, long-term care considerations and investment management.
Alongside Will arrangements, financial planning considerations are often closely connected. Investment decisions, pension planning and inheritance tax allowances can all influence how efficiently assets might pass between generations both in lifetime and, through the Will, on death.
For some families, another important aspect of estate planning, particularly with regard to the Will, is considering how financial resources might be used later in life, particularly if care or support becomes necessary. With this in mind, thoughts turn naturally to aligning investment management, protection from care costs and inheritance tax strategies.
Many people find that different parts of their estate planning have been put in place at different times of their life. For instance a Will may have been written long ago when circumstances, wishes and goals were completely different and probably were not discussed at length even then.
Writing your Will may have seemed straightforward and sensible at the time. But without reviewing it together regularly with your financial (and life) objectives it is not always clear whether the overall plan still reflects current intentions and your life situation as it stands. It is critical that the financial and legal arrangements for your estate planning are perfectly aligned. If they are not, it can create unwanted upset down the line.
Local Estate Planning Events
To help people understand these issues more clearly, we will be running a series of free Estate Planning seminars locally this June and July. These sessions will explore key elements such as Wills, LPAs and Trusts and explain how they work alongside your financial planning arrangements like inheritance tax, investment management and care fee planning.
Tuesday 23rd June - 2.30pm - 3.30pm - St Peter’s Church, Henleaze
Wednesday 24th June - 10am - 11am - Thornbury URC
Tuesday 30th June - 6pm - 7pm - Stoke Lodge, Stoke Bishop
Wednesday 1st July - 2.30pm - 3.30pm - St Peter’s church, Henleaze
Tuesday 7th July - 10am - 11am - Henleaze Bowling Club
Call 0117 3636 212 or email community@haroldstephens.co.uk to book your place.