Many thousands of people die every year without making a will, as they mistakenly believe that their estate will automatically go to the right person. However this is often not the case where the rules of intestacy are applied, as the law in its current form can result in unintended consequences.
In an attempt to reduce confusion new rules are being implemented from 1st October 2014. However, this will still lead to complications in certain circumstances, with potentially unwanted outcomes.
Simpler Rules
Current rules state that if the value of the deceased estate is greater than £450,000, a surviving spouse or civil partner with no surviving children must share the excess with other relatives. This means that partners could receive only part of the estate or end up jointly owning large assets like the family home. The new rules mean that the spouse or civil partners will inherit the whole estate, which is an improvement in this case.
Furthermore under the new rules, if there are children involved, the surviving spouse or civil partner will inherit the first £250,000 absolutely, followed by half the remainder of the estate with the other half being inherited by the deceased’s children. This is a welcome simplification of the current rules, where the first £250,000 is inherited by the spouse or civil partner, who then retains a “life interest” in half of the remainder (to be distributed to the deceased’s children on their death), and the children receiving the other half absolutely.
The rules relating to adopted children are also being revised in that the new rules will allow children who are subsequently adopted to inherit from their blood relatives.
No “Common Law”
Importantly the law does not recognise the concept of “Common-law partner”. There are no legal rights on intestacy whatsoever if your are co-habiting but unmarried, and it is particularly important to write a will in this situation. There was some discussion about new rights in these circumstances but this has been put on hold indefinitely.
There are many potential pitfalls of dying without a valid will. Your estate may not be divided as planned even with the simpler regulations. Making a will can reduce anxiety and ensure that your wishes are reflected.
