When someone dies without leaving a valid Will, this is known as dying intestate.
Their estate is then distributed in accordance with the latest Intestacy Rules which were updated in 2020 and these rules often leave those who should be provided for without any inheritance.
As set out in the Inheritance and Trustees’ Power Act, the rules determine who inherits your estate based on family connections and not your final wishes. The rules only take into account spouse and blood lines and do not give consideration to the closeness of your other relationships, or who needs it most. The Rules will distribute your estate to your family members in a strict order, depending on which relatives are left behind.
Making a complete Will is always the best way to make sure that your loved ones are fully protected in the event of your death. Any assets falling outside of your Will will then be directed by Intestacy Rules.
Our current Intestacy Rules only apply to a person who has lived and died in England or Wales as Scotland has its own more ‘flexible’ Intestacy Rules.
So what are the Intestacy Rules in England and Wales?
- The Rules of Intestacy came into force on 1st October 2014.
- Under these Rules, when someone dies leaving a spouse or civil partner but no surviving children, then the estate is paid to the spouse or civil partner absolutely.
- If someone dies leaving a spouse AND surviving children then their estate is divided as follows:
- The Government made a change on 6th February 2020, whereby the Statutory Legacy increased from £250,000.00 to £270,000.00 which means that the surviving spouse or civil partner will keep assets and all the personal possessions up to that value.
- The surviving spouse civil partner will also receive an absolute interest in half of the remainder of the residuary estate.
- The other half is then divided equally between any surviving children.
The increase in Statutory Legacy is a welcome one, but not one that should be relied upon in place of making a Will. There is no substitute for having a professional Will drafted especially when under the Rules of Intestacy unmarried partners will not inherit.
If the Intestacy Rules fails to make suitable provision from the deceased’s estate you may still be eligible to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975.
Making a valid Will is the only way to truly protect your loved ones. We’ve produced this handy list of scenarios that you may well need to make provision for that you may not have even considered:
Guardianship – appoint a legal guardian to look after your children should both parents die and the children are under 18.
Your children’s financial future – as well as saying who will raise your children, you can make plans to provide for their financial for education, daily living or a nest egg.
Provide for your dependents, including step-children and foster children – you may not have children of your own and want to provide for your dependents and your Will needs to name them.
Protect your partner if you’re unmarried – unmarried partners aren’t entitled to anything unless specified in your Will.
Protect your family home – if the home is in your name and you die without a Will, your unmarried partner and/or step-children may lose their home.
Prevent family disputes – where money is concerned can often lead to family arguments amongst those you leave behind. Make your wishes clear in your Will.
Avoid paying more inheritance tax – this is a huge minefield and something that should be reviewed to ensure you all pay as little tax as possible.
Protect your new spouse – when you divorce your existing will automatically become invalid in England and Wales leaving it open to Intestacy Rules.
Choose an executor – name someone you trust to deal with your affairs.
Protect your pets – some people love their pets more than people, so make provisions for your furry friends too.
Protect your digital assets – with most things online from digital accounts, music, photographs and websites, these can disappear if not accounted for as part of your Will.
Support a charity – leave a lasting legacy to a charity of your choosing.
If you’d like to talk to us about making a Will and avoiding the financial pitfalls of Intestacy Rules, then our team at Sovereign Wills and Estate Planning are here to help. Please feel free to contact us and let us draw up a professional and valid Will that will protect you and your loved ones, giving you complete peace of mind.