The intestacy laws of England and Wales governing who will inherit the estate of someone who dies without a Will, have recently changed. The "estate" for these purposes does not include jointly owned assets which pass automatically to the surviving co-owner (such as money in a joint bank account or a property owned by "joint tenants"). Furthermore, the rules generally only apply to English/Welsh real estate and the worldwide moveable assets of a person who dies domiciled in England or Wales.
Before 1 October 2014, if the estate of a deceased person exceeded a certain value, his surviving spouse or civil partner would have to share the assets with other relatives. For example, the deceased's parents, or brothers or sisters could be entitled to a share of an estate worth more than £450,000 if the deceased left a spouse but no children or grandchildren. This has now been amended so that, if a person dies leaving no children (or grandchildren), his surviving spouse/civil partner will inherit the entire estate. Parents, siblings and other relatives will only inherit if there is neither a spouse nor children/grandchildren, bringing the law into line with most people's expectations.
However, if there are children or grandchildren, a surviving spouse or civil partner will still have to share the estate with them where the estate exceeds £250,000. The surviving spouse will be entitled to all of the deceased's personal belongings plus a legacy worth £250,000 and one half of the residue of the estate. The other half will pass to the children and this may result in an unnecessary IHT charge. The surviving spouse is nevertheless in a better position under the new rules, since they were previously only entitled to the personal belongings, the legacy and a life interest in half of the residue.
While the new rules bring the succession laws more up to date, it is far better to make a Will to ensure that your estate passes to the intended beneficiaries. A Will also enables you to appoint guardians of your choice to look after your minor children, appoint people whom you trust to be your executors and trustees and gives scope for potential IHT savings.