Where there’s a will...
If you don’t make a will, you could end up leaving your relatives with serious problems after your death. Dying without a will increases the complexity and time involved in dealing with your estate. And the resulting uncertainty or disagreements between relatives can sour family relationships.
If a person dies intestate – without a will – the law will determine who inherits what. Many people believe that all their assets will automatically go to their surviving spouse or civil partner, but that is only the case for small estates. Since 1993, the statutory legacy that a surviving spouse (and nowadays a civil partner) can inherit in England and Wales has been set at £125,000 where there are surviving children and £200,000 otherwise.
The Government recently announced that these limits will go up to £250,000 and £450,000 from 1 February 2009. While this will give extra protection to surviving spouses and partners, it will not ensure that your estate is distributed how you would wish. There will still be cases where a family home has to be sold to enable children or other relatives to inherit their share of an estate under the intestacy rules.
The intestacy rules are different in Scotland. A surviving spouse who lived in a house owned by the deceased has a prior right to the home up to a value of £300,000 plus specified amounts of other assets. In Northern Ireland, the limits have been £250,000 and £450,000 since 1 January 2008.
The need for a will is even greater for people who live together without getting married or registering a civil partnership. If one partner dies intestate, their estate will pass to their family, with the only exception being their house if the couple owned it jointly.
Another very good reason for writing a will is to make sure your estate is distributed tax efficiently. Operation of the intestacy rules may result in more inheritance tax than necessary being paid on the intestate’s death or on a subsequent death.
Even if you already have a will, your circumstances and tax legislation may have changed. If you have no will, or have one but have not reviewed it recently, or want to minimise inheritance tax on your estate, please ask us for advice.