Passing away without a Will, otherwise called intestacy, means that the law decides who inherits your estate rather than your estate passing according to your wishes or intentions.

This means that a family member who you have not spoken to for 40 years could well inherit, in certain circumstances.

This can cause distress, at what is undoubtedly a difficult time, to your partner, friends and family who you would have included provision for; had you made a Will.

If you pass away without making a Will then the following inherit in this order:

  1. Children or their descendants
  2. Parents
  3. Brothers or sisters or their descendants
  4. Half siblings or their descendants
  5. Grandparents
  6. Uncles and/or aunts or their descendants
  7. Half uncles and/or aunts or their descendants
  8. Whole estate passes to the crown.

The law

The law on intestacy changed on 1 October 2014, marking changes for married individuals with or without children; however the position for unmarried partners and cohabitees remain the same. Below details the position for each;

Married individuals without children

Before the change in law – The first £450,000 alongside 50% of the remaining estate would go to the surviving spouse under the intestacy rules. The remaining 50% was split between the deceased’s blood relatives according to the above order of inheritance. This means that surviving parents would likely have inherited half of anything over £450,000.

Now – The surviving spouse will receive the entire estate and therefore other relatives will not receive anything.

Married individuals with children

Before the change in lawThe spouse received everything up to £250,000, with the children inheriting 50% of any money above £250,000 immediately. If the children were not yet 18 then the money was held in a trust until they were of age. The remaining 50% of money over £250,000 also went to the children, however the surviving spouse would retain a “life interest” in the money whilst they are still alive. This meant that the spouse could receive any interest, but not touch the capital which is retained for the children. This would then pass to the children when the surviving spouse passed away.

Now – The surviving spouse will still take the first £250,000 with the children receiving 50% of the money over £250,000. However the life interest concept has been removed and the spouse is entitled to the remaining 50% outright. This may be particularly relevant for second marriages where children from a previous relationship would receive far less than the second spouse under the intestacy rules.

Unmarried partner with or without children

There has been no change in the law for unmarried partners. If an unmarried partner dies without a Will, then their partner does not receive anything. Although there has been some controversy, the concept of a “common law partner” does not exist in UK law and therefore no regard is taken of the length of the relationship or cohabitation. Blood relatives will instead inherit, in order of the above inheritance list.

With all the above positions, if the individual who has passed away has no living relatives, then the whole estate will pass to the Crown. The Crown received 8 million pounds in 2014 from individuals who had passed away without any blood relatives and without making a Will leaving their estate to anyone else. This could have been avoided if these individuals had made a Will.

On a separate note, a Will allows you to consider Inheritance Tax implications and plan ahead to limit the amount of tax your estate pays on death.

Why make a Will?

Despite the changes in the law; the pitfalls remain largely the same. A Will makes sure that your estate passes to the people that you want it to. Leaving the law to dictate who inherits can be both precarious and inefficient from a tax perspective. As such, there is no down side to making a Will; it can be revoked or amended within your lifetime and provides you and your family with a peace of mind that the law of intestacy cannot.

If you would like any help or advice concerning your Will, please contact Shirah Real in our Private Client Department.