If someone dies without making a valid will, they are said to have died intestate. Should this situation arise, the estate and possessions of the deceased person will be divided according to rules set out in the Administration of Estates Act 1925.
It is important that you do not assume that because you are married or in a civil partnership your spouse or civil partner will automatically inherit all your property even if you have not made a will. As of 1 February 2009, the basic rule is that if you die intestate, your spouse or civil partner will receive your chattels and the first £250,000 of the estate if there are children and the first £450,000 if there are none.
Where the estate is worth more than the statutory legacy, the position becomes more complicated.
If you have children, your spouse or civil partner will receive £250,000 and a life interest in half of the remainder of the estate. On his or her death, this passes to your children. Your children receive the other half of the remainder of the estate when they reach 18 or when they marry.
If you do not have children, your spouse or civil partner will receive £450,000 plus half the balance of the remainder of the estate. The remaining half of the balance goes to other family members in a strict order of legal precedence.
It is important to be aware that the intestacy rules do not recognise a deceased person’s step-children, only their natural, adopted or illegitimate children.
Although the rules afford some protection to married couples and civil partners, it is recommended that you both have a will in order to ensure that your wishes are carried out. Remember, marriage or civil partnership automatically invalidates any existing will.
Entitlement under the intestacy rules only applies to couples who are married or in a civil partnership. Couples who are co-habiting have no protection. If you are co-habiting with your partner and wish for them to benefit financially upon your death, it is essential to make a will to this effect. Otherwise, your estate will pass to your relatives or, where there are none, to the Crown – unless your partner can make a claim for financial provision to be made on the ground that they were financially dependent on you.
Whatever your situation, the making of a will not only ensures that your wishes are complied with, but it can also help to minimise the tax burden when you die. In addition, it is normally possible to administer a testate estate more quickly than one that is intestate.