Why You Need a Will: Understanding the Law of Intestacy in England & Wales
Have you ever thought about what happens to your assets if you pass away without a Will? In England and Wales, if you die intestate (i.e. without a valid Will), your estate is distributed according to the rigid intestacy rules under section 46 of the Administration of Estates Act [1925].
Given the legislation is almost 100 years old, it is likely that the provisions will not align with your personal wishes, or your family’s needs. This is particularly the case given non-nuclear families are now less likely to be the exception, and more likely to be the norm. To ensure that your estate passes in accordance with your wishes, and to also avoid unnecessary stress for your loved ones, preparing a properly drafted valid Will is crucial.
The Basics of Intestacy Rules
Under the intestacy rules, if you die without a Will, your estate is divided based on a predefined familial hierarchy. Here’s a brief overview:
If you are married or have a civil partner: Your spouse or civil partner inherits the first £322,000 of your estate, all of your personal belongings, and half of the remaining estate. The rest is divided equally among your children (if you have any). If you do not have any children, then your spouse or civil partner will inherit the entirety of your estate.
If you have no spouse or civil partner, but you do have children: If there is no surviving spouse or civil partner, then your children inherit everything, divided equally. If you have children who have passed away before you, and those children have left their own surviving children (i.e. your grandchildren), then your grandchild(ren) will inherit the share of the estate which their parent would have taken had they survived.
If you have no spouse and no children: Your estate is then distributed down the line to other family members in a specific order; first to your surviving parent(s), then between your siblings (or to your nieces and nephews if your siblings have predeceased you), then to your surviving grandparent(s), then between your aunts/uncles (or to your cousins if your aunts or uncles have predeceased you).
If you have no surviving relatives: If there are no surviving relatives, then your entire estate goes to the Crown (the government).
The Risks of Intestacy
Unintended Beneficiaries: Intestacy rules don't account for modern family dynamics, such as stepchildren, unmarried partners, or close friends. Those who you might want to benefit from your estate could be left out entirely.
Family Disputes: Ambiguity in asset distribution can lead to family disputes, causing emotional and financial strain during an already difficult time.
Delayed Distribution: The legal process of administering an intestate estate is often more complex and time-consuming, delaying the distribution of your assets.
Failing to Provide for High-Dependency Beneficiaries: If you have an intended beneficiary who, for whatever reason, would struggle to manage their own finances (e.g. a disabled beneficiary, or a beneficiary who has struggled with alcohol or addiction issues), then passing a significant sum of money to them absolutely may not be in their best interests. Drafting a Will can allow for protective trusts to be incorporated, so you can ensure these beneficiaries are sustainably financially provided for.
Not Appointing Guardians for your Children: You can nominate guardians for your minor children in your Will. This provides some certainty for your surviving family if you pass away before your children reach their majority.
Failing to Maximise Available Inheritance Tax Allowances: The way you structure the distribution of your estate can impact the availability of certain inheritance tax allowances, or you can waste an inheritance tax relief by gifting an asset to a beneficiary who is already entitled to an exemption. Taking advice on the most tax-efficient way to distribute your estate is important if you are nearing the inheritance tax threshold.
The Solution: Make a Will
Creating a Will ensures that your assets are distributed according to your wishes, provides peace of mind, and minimises the risk of potential conflicts. Here's why you should consider preparing a Will through a solicitor:
Expert Guidance: A solicitor provides professional advice tailored to your personal circumstances, ensuring that your Will is suited for your individual requirements.
Avoiding Common Pitfalls: Solicitors help you avoid common mistakes that can render a Will invalid, cause unintended tax problems, or cause ambiguity in its interpretation.
Updating Your Will: Life changes, such as marriage, divorce, or the birth of a child, necessitate updates to your Will. A solicitor can guide you through these adjustments as necessary.
Complex Estates: If your estate includes business interests, overseas properties, or other complexities, a solicitor's expertise is invaluable in ensuring all aspects are properly addressed.
Take Control of Your Legacy
Don’t leave the distribution of your estate to chance. By preparing a Will through a solicitor, you ensure that your assets are distributed according to your wishes, providing security and clarity for your loved ones. Contact the Private Client Team at Leeds Day today to take the first step in securing your legacy.
Act now and give yourself and your family the peace of mind you deserve.
