A brief surf of the internet for ‘dying without a will’ throws up many household names from the entertainment industry who have died without making a will. It seems easy to imagine why a will might be important when there is significant wealth and ongoing royalties to consider. But why should those of us with a moderate amount of assets go through the investment of time and cost to put an up to date will in place? Everything will go to my spouse / civil partner / life partner and family anyway if I die without a will, correct? NO!
For a start, there are several different elements that constitute what we commonly refer to as your “estate” when you die:
- Your share of jointly owned assets
- Lump sum death benefits from pensions and life assurance policies
- Assets in your name that pass under the terms of your will
Joint assets are commonly bank accounts, savings and property owned with a partner or spouse. These commonly pass automatically to the surviving joint owner and do not even fall into your estate. This is because most joint assets are owned as “joint beneficial tenants.” However, if assets are owned as “tenants in common”, your share of any joint assets will fall into your estate on death. How do you own your joint assets? Have you ever checked what will happen to your share if you die?
Pensions and life policies often pay out a lump sum benefit in the event of your death. You can usually give instructions or guidance to the policy provider for these lump sums to be paid to specific beneficiaries, or into a trust, so that they are not paid into your estate.
This can be useful for any number of reasons – firstly if you are lucky enough to have accrued sufficient wealth that your estate will be subject to inheritance tax, getting these lump sums paid outside of your estate can reduce the inheritance tax bill. Secondly, it can take several weeks or months for a grant of probate (or other grant of representation) to be obtained by your executors or administrators to unlock assets that are held in your sole name. Lump sums from a pension or life policy, however, will often be paid out independently of your estate and without the need for a grant of representation meaning that they can be a valuable source of funds for your family at a time when things are in turmoil. For example, there may be expenses to be met such as your funeral costs, travel for family and friends who may want to return from overseas for your funeral and even living costs should your family take time off work in the event of your death. Finally, you may want different beneficiaries to benefit from your pension or your death in service payment, than your will.
So, for those of us who dashed off a nomination form years ago when taking out life cover relating to our mortgage, when starting a new job which offered a death in service benefit or who have collected assorted occupational pensions from different employers, it’s absolutely vital to set aside an hour or so (soon, not in 6 months’ time) to ring around the providers to check whether you have any instructions in place for the lump sum death benefit and whether these instructions are up to date.
Assets in your sole name usually fall into your estate and pass under your will, or under the rules of intestacy if you die without a will or do not leave a valid will.
The intestacy rules were updated in October 2014 and provide as follows:
If you have a surviving spouse or registered civil partner and children:
Surviving spouse receives all personal effects, the statutory legacy of £250,000 and one half of the residue of your estate.
If your estate exceeds the value of £250,000, your children receive the remaining half of the residue of your estate.
If you have a surviving spouse or registered civil partner but no issue (ie children, grandchildren and further remoter issue):
Surviving spouse or registered civil partner receives everything.
If you are not survived by a spouse or registered civil partner, then your estate passes to your children in the first instance (or the issue of any child who has died during your lifetime); if you do not have children there is a statutory order in which your wider family inherits, including parents, siblings, half siblings, grandparents, aunts and uncles and the list continues. This list also provides that if a person within the statutory order predeceases you, their issue inherit the share that they would have received. This can often mean that the persons that actually end up benefiting, are within a second or third generation down from the original individual, which might not be what was intended.
For some people, this may accurately reflect their wishes. For many, it will not, for example, are you in a blended family with children from a previous relationship? Are you co-habiting rather than married or in a registered civil partnership? Are you happy with your children or grandchildren inheriting at age 18? Who will look after your children if both parents die before they are 18? Who will administer your estate?
All these questions can be dealt with by taking specialist legal advice about a will from a qualified lawyer at a firm that is regulated by the Solicitors Regulation Authority.
Make a positive choice about your estate when you die, rather than dying without a will and leaving things to chance and risking your estate passing to somebody that you never intended to benefit.
If you would like to make an appointment to discuss putting in place a will, please contact Clare King on 0113 336 3363 or email@example.com.
 Inheritance and Trustees’ Powers Act 2014
 Or the issue of any child that died during your lifetime
Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.