NOTES ON INTESTACY & WILLS

A Will
If you die without a Will then it could be very expensive to administer your estate. If you have a Will then it should be reviewed every few years to take account of changing circumstances within the family, and it is particularly important to review it after the death of a close family member. One point which can get overlooked is that on marriage any previous Will automatically becomes null and void. Those with Second Homes Overseas could be leaving their executors with quite a problem on their death in respect of death duties being payable not just here but also in the country in which the property is situated. The rules are quite complicated and which country it is in is also very relevant. If you are in this situation it would be worth talking to your solicitor about it. If you become resident overseas you become subject to their laws in respect of the way you can leave your estate in your Will. For some this may not be what they wish.

INTESTACY or Who gets the estate if there is no will?
All debts (including mortgages and other loans) must be repaid first, whether the dead person has made a will or not. After that, the Administration of Estates Act 1925 sets out who gets the remainder in every situation where there is no will. Some of the more common situations are as follows.
There is a useful chart on:-
http://www.co-operative.coop/Legal Services/PDFs/400854 legal graphic.pdf

The amount to which an individual is entitled is reviewed quite regularly so also check the link below.
If there is a husband, wife or civil partner, but no other relatives
The husband, wife or registered civil partner gets everything (but their unmarried or unregistered partner gets nothing).
If there is a husband or wife and children
The husband or wife gets:
The 'personal chattels' + the first £250,000; and a life interest in half of what is left (for example, the income or interest if the money is invested). The capital (the original amount) passes to their children when the surviving husband or wife dies.
The children share between them:
Half what is left straight away, if they are 18 or over; and the other half when the surviving parent dies.
Stepchildren get nothing (unless they are named in a will).
If one of the children has already died, leaving children of their own, their share will pass to those children (that is, the grandchildren of the person whose will is being dealt with).
If there is a husband or wife and relatives (but no children)
The husband or wife gets:
The 'personal chattels' + the first £450,000; and half what is left.
The parents of the dead person, or if they have died, the brothers and sisters or their descendants, share the other half of what is left.
If there are children, but no living husband or wife
The children share everything equally. If one of the children has already died, leaving children of their own, those children will share what their parent would have inherited if the parent had been alive. If the children are under 18, their share will be looked after by trustees until they reach 18.
If there is no husband or wife or children
Everything will pass to the next available group of relatives, in the same order as that for applying for letters of administration. This means:

  1. the parents of the dead person;
  2. brothers or sisters of the dead person who have the same mother and father;
  3. half-brothers or half-sisters (who had either the same mother or the same father);
  4. grandparents;
  5. uncles and aunts 'of the whole blood' (this means brothers and sisters of the parents of the dead person, as long as they had the same mother and father themselves);
  6. uncles and aunts 'of the half blood' (this means brothers and sisters of the parents of the dead person who had only the same mother or father);
  7. the Crown (the state).

Helpful information can be found by clicking on on this link.

HAVE YOU INCLUDED IN YOUR WILL INSTRUCTIONS TO YOUR EXECUTORS TO PUT SOME OR ALL OF YOUR ESTATE INTO A TRUST?
If you have then you need to contact your Solicitor and check that the Trust to be formed will not result in unnecessary amounts of inheritance tax becoming payable.

DO YOU RECEIVE INCOME FROM A TRUST?
If you do then it may well be from a type of Trust that under the new rules relating to the taxation of trusts could be subject to Inheritance Tax when your interest in it ceases. It would be worth discussing this with your Solicitor to see whether firstly it is a Trust which will fall into the new tax regime, and secondly if it does fall foul of the new rules can any changes be made to the Trust in order to avoid the tax charge. I hope you have written a Will. If you have not and you die intestate you may find your assets going to members of the family you least want them to go to.

Accumulation & Maintenance Trusts
If you or family have one of these Trusts operating and it was created prior to 22nd March 2006 then since 6th April 2008 Inheritance Tax may become chargeable on the assets at 10 year intervals. If you have not discussed this with your solicitor then I suggest you check out the position immediately.

Lasting Powers of Attorney
These replaced the Enduring Power of Attorney from 1st October 2007. They are significantly different and require a different registration process. They are a very useful document when a person’s health deteriorates badly, but must be put in place well in advance. If you have a signed Enduring Power of Attorney then that is still perfectly legal.