Who will inherit?
No Will? The State decides
If you do not have a valid Will, then the distribution of our estate is subject to the laws of intestacy. These do not always do what you would expect. For example, if you die leaving a surviving spouse but no children, you might expect your widow(er) would receive everything, but that is not always the case. Under the intestacy rules for England and Wales, your surviving spouse would be entitled to:
Your personal chattels;
£450,000 outright; and
One of half the residue of your estate outright.
The other 50% of the residue would go to your parent(s), or if they are not alive your siblings or, if they have also predeceased you, their offspring. In Northern Ireland the rules are very similar, but Scotland’s are significantly different.
Turning expectations to reality
After much consultation, the Ministry of Justice has proposed a reform of the English and Welsh intestacy rules, so that the surviving spouse would inherit the whole estate if there are no children. The Ministry has also proposed revisions planned for the estate distribution when there are children involved.
The proposals were accompanied by a draft Inheritance and Trustees’ Powers Bill, but it looks unlikely this will arrive in Parliament soon, as it was not mentioned in May’s Queen’s Speech.
The proposed changes will, in the Ministry’s view, “ensure the laws on intestacy become closer aligned with public expectations”. But the fact remains, even once the Bill becomes law, the new intestacy regime will not replace the need for an up-to-date Will, tailored to your wishes.
If you have not made a Will, or you have not reviewed your Will in the past few years, please make the effort. You cannot (re)write your Will after the event!
It is also important to ensure that your children have written Wills, otherwise some of your Inheritance Tax planning could be undermined if they die intestate.