Legal News | 20.10.22
Implications of intestacy
According to data from 2021, only 40% of adults in the UK have a Will. For the other 60%, their estates will pass according to the rules of intestacy.
These rules set out the order of inheritance where an individual dies without a valid Will. Currently, if an estate is worth less than £270,000, a surviving spouse or civil partner will inherit the whole estate, including all personal belongings. For an estate exceeding £270,000, that excess will be shared as to 50% for a surviving spouse/civil partner and 50% divided between any children the deceased left. If there was no surviving spouse or civil partner, then the order of inheritance is as follows:
• Children
• Parents
• Siblings
• Half-siblings
• Grandparents
• Aunts and uncles
• Half-aunts and half-uncles.
If the deceased is not survived by any of the above, their entire estate goes to the Crown or Duchy of Cornwall or Lancaster, depending where the deceased lived.
Unfortunately, the intestacy rules do not necessarily reflect the modern world. Unmarried couples are not included in the order of inheritance, nor are unadopted step-children. Where blended families are concerned, not leaving a Will could result in loved ones (and those financially dependent on you) not being provided for. Dying intestate can also result in an unanticipated inheritance tax bill as only assets passing to a spouse are entirely free of inheritance tax. All assets above the deceased’s nil rate band* passing to other beneficiaries under the rules of intestacy will attract inheritance tax at 40%.
Intestacy can be avoided by preparing a valid Will during your lifetime. The benefit is that you can clearly outline to whom you would like your estate to pass, ensuring all your loved ones are provided for.
If someone has died intestate, the intestacy can be varied within two years following their death provided that only adult beneficiaries are entitled under the intestacy rules and they unanimously agree.
Where there is no Will and an agreement with the beneficiaries cannot be reached, or not all beneficiaries are capable of agreeing, the only way someone outside of the order of intestacy can inherit is by making a claim under the Inheritance (Provision for Family and Dependants) Act 1975. This must be made in most cases within 6 months of the issue of the Grant of Letters of Administration.
Wansbroughs offers a wide range of services which include Will drafting and assistance in making a claim against an estate. If your loved one has died intestate and you are worried you will not inherit, or if you are currently without a Will, please get in touch with your usual Wansbroughs contact or email wealth@wansbroughs.com.
*Nil rate band is currently £325,000. If the estate contains a property which passes by the rules of intestacy to direct descendants of the deceased, the estate will also benefit from an additional £175,000 relief.*
