Nobody likes to think about dying, however sorting out what will happen to your family financially should the worst happen is important. The best way to do this is by drawing up a valid will, however intestacy (dying without a will) still affects millions of people every year – figures from the Co-operative Legal Services (CLS) shows that 47% of UK adults will die intestate.
If you don’t have a will, essentially it will be down to the government to decide who will benefit from your estate. This is done under the Rules of Intestacy. These rules were quite archaic, however today (1st October) the government is bringing in changes to improve the system.
“The new intestacy rules will simplify how an estate is distributed in the event of someone dying without the correct paperwork in place,” says Danny Cox from adviser Hargreaves Lansdown. “But while this should make life easier for those left behind, this also reinforces the importance of having a valid will in the first place.”
So how will the changes affect you?
Previous rules for married couples and civil partners without children: When someone died intestate, the surviving partner would receive the first £450,000 of the estate plus interest, 50% of the balance over that and also any of the deceased person’s personal possessions (known as chattels). The remaining 50% would then be left to any blood relatives.
New rules: When there are no children, the entire estate will now be left to the surviving partner.
Previous rules for married couples and civil partners with children: The partner would take the first £250,000 of all the deceased’s chattels. The spouse or partner would then also have a life interest in one half of the balance, while the children would take the other half.
New rules: The partner will still take the first £250,000 of the deceased’s chattels, however rather than having a life interest in 50% of the remaining balance they will now receive a capital sum outright.
Previous rules for unmarried couples: Unmarried couples received nothing from their partner’s estate.
New rules: Initially there had been a proposal to include cohabitees, however this has not been included in the agreed changes. This means it is especially important for unmarried couples to draw up a valid will.