Dying without a will (intestacy)

The law expressly states who gets what, how much and when if you do not make a will.

What would happen if…?

A husband dies with an estate of £300,000 including his share of the house held as tenants in common, leaving a wife and son aged 12.

His wife will receive £250,000 plus his personal chattels. The remaining £50,000 is split £25,000 into a life interest trust for his wife and £25,000 to his son (the amount will be held on trust until he is 18).

Comments

The creation of this trust structure will involve a disproportionate administration cost. In addition the son will inherit £25,000 at 18 years old. Some may argue this money will not last long and it would have been the husband’s intention to pass everything to his wife as an income from £25,000 is not adequately addressing her needs.

One of the partners of an unmarried couple dies. They’ve been together 15 years, have two children under 18 and the deceased leaves an estate worth £150,000

The children inherit everything equally at 18 years of age.

Comments

The surviving partner is not catered for at all, yet the couple have lived as though they were married and the survivor was financially dependent upon the deceased partner. He or she will have to apply to court to gain some right to inherit from the estate.

A successful young business woman who has built up a business partnership worth over £1million with her brother dies in an accident. She is single and has no children, although her parents are still alive.

Her parents inherit everything equally.

Comments

The ownership of her share of the business passes to a much older generation and to parents who have no knowledge of the business. The brother who would have expected outright ownership now has his parents as co-owners who may not share his enthusiasm for the business.

If the business is sold, the parents will receive half the proceeds and ultimately these may be subject to inheritance tax on the death of the second parent.

It may be possible to overcome this by the parents agreeing to enter into a deed of variation but this depends on their willingness to do so and mental capacity.

Making a will avoids these situations and at a fraction of the cost.

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