An estimated two-thirds of British Citizens have not made a Will to pass on their wealth.
Without a Will, there is a risk that your estate will not go to those you want to receive it. This means that disputes could arise between family members and others who may consider that they should receive a share of your assets.
It also means that the opportunity to legitimately minimise the amount of Inheritance Tax payable has been lost, and estates where no Will exists may be liable to pay a substantial sum to HM Revenue & Customs.
What happens to your estate if you do not leave a Will?
If someone does not leave a Will, their estate will be distributed in accordance with the Rules of Intestacy. These rules set out a strict order in which relatives will inherit.
If the deceased was married with children, then their spouse will inherit all of their personal possessions together with the first £270,000 of the net estate, i.e. what remains in the estate after all bills and other liabilities have been paid.
The remainder of the estate will be split so that the spouse receives one half and the deceased’s children share equally in the other half.
Where the deceased does not have a spouse or children, the next relatives in line to inherit are parents, followed by siblings, grandparents and uncles and aunts.
Cohabiting partners and stepchildren will not inherit anything under the Rules, however close their relationship was to the deceased. If they were supported financially by the deceased during their lifetime, they may be able to make a legal claim against the estate.
Administering an estate where there is no Will
The administration process can be more complex when the deceased did not leave a Will. It may not initially be clear who will deal with the winding up of the estate, or there may not be anyone who wishes to take on this role, which can be difficult and time-consuming. As well as defending potential claims on behalf of the estate, the administrator will need to ensure they identify all potential beneficiaries, advertising in the press where necessary.
What should you do if you want to leave a Will, but you do not want your children to inherit?
Some people avoid making a Will as they are reluctant to leave money to certain relatives. In fact, an increasing number of celebrities, allegedly including Daniel Craig, Sting, Andrew Lloyd Webber, Simon Cowell and Nigella Lawson are opting not to leave their fortunes to their children, hoping that instead their offspring will work hard and support themselves.
If you decide to take this approach, then as well as setting out your wishes clearly in your Will, you should talk to your children and explain why you are not going to be leaving them your money.
You can also consider other options, such as leaving money in trust until they reach a certain age or providing money for things like education or a deposit for a home. Whatever you decide to do, communication will help avoid disputes, as will ensuring you have a valid, up-to-date Will in place for when the time comes.
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