If you die Intestate (without a WIll) the law decides what happens to your property, and does so by following the “Intestacy Rules”. This may not always result in your property being distributed in the way that you want.
The Intestacy rules work like this:
If you are unmarried:
* Property is distributed equally between your children
* If you have no children property is given equally between your parents, or soley to one if one parent has predeceased
* If neither parent is alive your property is given equally to your siblings “of the whole blood” i.e. where both parents are the same.
*If you don’t have whole siblings, but do have half siblings, they will benefit in equal shares.
* If you don’t have any half siblings, your grandparents benefit equally
* If you have no grandparents, aunts and uncles of the whole blood benefit equally, and thereafter, any half aunts and uncles (i.e. half siblings of your parent)
* If you have none of these relatives your estate will pass to the Crown.
As you can see, the crucial point of this chain of Succession is that no provision is made for an unmarried partner. You could have been with your partner for years, but if you die without a Will they will not inherit anything. If you owned joint property, such as a house, together, or had a shared bank account, they will inherit that because it’s joint property, but any savings, ISAs, property and personal effects will fall into the Estate and will be distributed according to the Intestacy Rules. If the house is held as “tenants in common” (each own 50% of the house) your share of the property will be subject to the Intestacy Rules and your partner will have to buy your share from your Estate.
This is why it is so important to make a Will if you are unmarried but have a long term partner. It is possible for them to apply to the Court for relief, but this is an expensive, drawn out and complicated procedure, and leaving a Will protects against this.
If you are married or in a Civil Partnership:
* The first £250,000 and personal effects (“chattels”) goes to your Spouse or Civil Partner
* If it is worth more and you have any children (from this marriage or a previous one), your spouse will still inherit the first £250,000.
The rest of the Estate will be split in half and the Spouse/Civil partner will hold a “life interest” (explained below) in one half and the rest is split between the children equally. After their death the property subject to the life interest is split between the children.
* If there are no children your Spouse/Civil Partner will get the first £450,000 and half the remainder. Your parents will share the rest. If your parents have died, any brothers, sisters, nephews and nieces will share the rest. If there are none your spouse inherits everything
Again, this might not be what you wish to happen to your Estate. You may wish for your Spouse or Civil Partner to inherit everything, or you may wish to leave property or a gift to a close friend or a non-immediate relative such as a niece or nephew, or leave a donation to charity.
A “life interest” can also be very complicated to administer, requires Trustees to be appointed, and the spouse may have very little say in what is done with the property to be held on Trust. life interest in half of the remaining estate. If you are entitled to the life interest, you cannot get rid of or spend that part of the estate. You can, however, have the benefit of it during your lifetime, such an any interest received through investment.
Eg: Oscar is married to Constance. They have two children, Cyril and Vyvyan. Oscar died without leaving a will. His estate is worth £450,000. After Constance inherits the first £250,000, and all of the personal effects of Oscar, the Estate is worth £200,000. This is split into two halves. Cyril and Vyvyan split one half i.e. £50,000 each.
Constance will have a life interest in this £100,000. She cannot spend the £100,000 capital itself. It should be invested and she is entitled to the interest from this during her lifetime. On her death, the £100,000 is split between the children equally
There are also complications if there is physical property such as a house, but no liquid assets, meaning property has to be sold to pay off the various shares and you may not wish this to happen.
Making a Will ensures that all of your affairs are in order, and there are no complications after your death.