When someone passes away without a Will, it’s called dying intestate and the consequences can be more complicated than many people realise, especially for married couples. Kerry Davey a solicitor at JMP solicitors explains that there is a common belief that the surviving spouse or civil partner automatically inherits everything, but that’s not always the case. If the deceased had children, the rules of intestacy might mean the spouse doesn’t receive the entire estate, potentially leading to outcomes that don’t align with the deceased’s wishes and creating unnecessary tax burdens.
In England and Wales, intestacy laws strictly govern how an estate is divided. The surviving spouse or civil partner gets personal items, a fixed sum of £322,000, and half of the remaining estate. The other half is split between any children. This setup might leave the surviving spouse in a less secure financial position, particularly with larger estates or complex family dynamics.
Potential Tax Consequences
One significant advantage of having a Will is that it allows you to leave everything to your spouse or civil partner, avoiding Inheritance Tax. However, without a Will, assets passing to children could trigger a large Inheritance Tax bill. The portion of the estate that goes to the children isn’t exempt from tax, which means it could be taxed at 40% if it exceeds the current allowances. This could reduce the overall value of the estate, something that careful planning could have prevented.
Inheritance Act Claims by Surviving Spouses or Civil Partners
The intestacy rules might leave a surviving spouse or civil partner with less than expected, especially if the estate is large and the children inherit a significant portion. In such cases, the surviving spouse or partner might need to go to court to claim reasonable financial provision, a process that is often stressful, expensive, and potentially damaging to family relationships.
What About Unmarried Couples?
For unmarried couples, the situation is even more challenging. Intestacy laws do not recognise a surviving unmarried partner, no matter how long the relationship lasted or what assets were shared. If there are children, they inherit everything, leaving the surviving partner with nothing. If the children are minors, a trust must be established to manage their inheritance, adding another layer of complexity.
This lack of protection can lead to serious financial difficulties for the surviving partner, who may have to seek support from the estate through the courts. However, such claims are limited to what’s necessary for reasonable maintenance.
Don’t Leave It to Chance
To ensure your wishes are honoured, make a Will today. Contact Kerry to get started on 01476 565 295 or email [email protected] to make an appointment.
