Dangers of dying intestate
Recent research indicates that 62 per cent of adults in Britain do not have a will, despite the fact that an estimated 9 out of 10 know to whom they want their estate to be left. Whilst it is understandable that people do not like thinking about death nevertheless, how your estate will pass after your death is something that has to be faced eventually and steps taken to ensure that assets are passed on to the right people.
The only way to ensure that your wishes are carried out is by making a will. If you do not make a will you will have absolutely no say in who gets what, or who is appointed to deal with your estate, and recipients of your estate will be dictated by a set of rules known as the Intestacy Rules. This means that loved ones who are not related to you, such as step children and unmarried partners, will not receive anything or will be forced to make an application to the court to show that they were dependent upon you at the date of your death.
Indeed, if you have no family members then your assets could ultimately go to the Crown, even if you have a partner with whom you live.
How will you and your family be affected if you die intestate?
The example above shows how you can be affected by a relative dying and not leaving a will.
Example
You have been looking after your elderly mother Ivy for the last 15 years and upon her death you become the sole administrator of her estate under the rules of intestacy.
Unfortunately, your mother presumed that all her estate would automatically go to you and therefore never made a will, as she felt it wasn’t needed.
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Your family history
Thirty five years ago there was a family argument which resulted in your sister Claire breaking contact from the rest of the family. Neither you, your mother, or anyone else in the family ever had contact with Claire again. Claire later married and had two children, Rebecca and Steven. No one in the family knew that Claire had any children and the only time you received any information about Claire was when someone noticed her obituary in the paper. Under the rules of intestacy, rather than the entire estate going to you, the estate (after payment of tax, debts and funeral expenses) will be divided into 3 parts. Half will go to you, whilst the remaining half will be divided equally between your sister's two children, Rebecca and Steven. It is deemed that the children of any predeceased child of the deceased will take the share that their parent would have been entitled to if they were still alive and in equal shares if more than one. Thus, half of your mother's property will go to someone with whom the family has had no contact.
Problems on remarriage
Things can also become complicated in cases where someone has remarried and not made arrangements for children from previous marriages. For example, for smaller estates, let’s say a net estate of £400,000, the surviving spouse will take the bulk of the deceased’s estate meaning that they are free to spend the money or indeed possibly remarry, with the result that the children from the first marriage will inherit very little.
With the right advice, and the right type of will, it is possible to protect your children’s inheritance whilst still providing for your current spouse at the same time.
Finding out too late
Most people find themselves on the wrong side of the intestacy rules when it is too late. The rules may seem unjust to many people, but in reality, to accomplish a level of universal fairness is an impossible one. The only way to circumvent the obvious inadequacies of the intestacy rules is by making a will.
Not leaving a will can often mean extensive legal costs for your beneficiaries and failing to provide for a partner or dependent person will mean they will have to obtain legal advice and assistance to contest the rules imposed on your estate by the rules of intestacy, with no guaranteed result.
Complex cases can even require the professional help of a genealogist, at great cost, to clarify a family member’s right to a share in your estate.
Making sure a will is up to date
Even if you have made a will, you need to ensure it is up to date. Families often change with more children/grandchildren being born, or the unfortunate breakdown of a marriage.
One famous example of the dangers of not keeping your will updated is the tragic case of the actor Heath Ledger. He fathered a child outside of marriage and when the relationship with the child’s mother broke down shortly prior to his death, the only will in existence was one he had executed when he was childless. The will left everything to his parents and his sisters, with the result that his two-year old child was left with no absolute right to any of his money.
With the correctly updated provisions in his will he could have ensured that his daughter inherited a proportion of his wealth and the money was held in a trust for her, guaranteeing her financial security, and not left it in the hands of other people’s goodwill. By not having a will or not keeping your will up to date, anything could happen.
Critically if both parents are to die, you will have no say in who assumes the role of your children's guardians. If your children are under the age of 18 it is essential you have a will for this reason.
Danger of home-made wills
Many people write home-made wills or buy will making kits from stationers, in the belief that they will be just as effective as a professionally drawn will. In many cases this unfortunately proves to be incorrect, either because of mistakes that are made or simply due to a lack of understanding of the law.
It is unfortunately not until you pass away and your will is examined by a solicitor that the issues come to light, resulting in the possibility of the will being disregarded or ineffective and your estate being partially or completely intestate.
It is always important to remember that when you pay for a solicitor to draft your will, you are also paying for the advice and experience given by that solicitor who is subject to regulation by the Law Society, not to mention the peace of mind of knowing that your affairs are in order and in the hands of a professional.
These problems are usually compounded by the additional legal costs incurred to rectify any errors in a homemade will and can in some circumstances even exceed the cost of having a professionally drafted will in the first place.
The rules of intestacy should be avoided at all costs and not making a will really should not be an option.
Making a will can also save money
Making a will helps avoid unforeseen issues like this from occurring. Not to mention that wills, specifically wills online, are relatively inexpensive and can actually save money in comparison to the expenses which can be incurred resolving matters of estate after a death if they are taken to Crown Court. Making a will is now easier than ever and many online wills can be arranged for a much cheaper price than traditional will solicitors. However, it is important to remember that the cheapest option isn’t always the best. Some DIY will packages leave people exposed because of minor issues in the terminology used.
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