February 11, 2020

The Intestacy Trap

What is Intestacy?

Having a Will when you did means that you are in control of who receives your property. In the absence of you making these decisions, the law makes these decisions for you. In effect, the state decides who gets what!  But the state has no knowledge of our individual circumstances, it has no interest in the nuances of family relations.

Intestacy, therefore, is the name given to passing away without a valid Will in place.

The law of intestacy governs such situations where there is an estate that needs distributing but no legally valid Will to do the job. The Administration of Estate Act 1925 as extended and modified by the Inheritance and Trustees Powers Act dictates who gets what and you may be surprised by some of the possible outcomes;

  • Even where two people are married or where a civil partnership is in place, not all of the estate of the first to die necessarily passes to the survivor. The law allows for a ‘fixed net sum’ or statutory legacy to pass with the remainder passing to other family members.
  • Nothing passes between partners who are neither married or in a civil partnership.
  • Nothing passes to a deceased’s step-children or partners children
  • An inheritance tax liability can be created after the first married person (or civil partner). This could lead to the family home having to be sold to pay tax whilst the survivor is still alive.

It should also be remembered that jointly held assets will pass to any surviving joint owners irrespective of your wishes and whether you die intestate (without a Will) or testate (with a Will) unless you change how the asset is owned during your lifetime. The principle of survivorship apples mainly to property owned as joint tenants and joint bank accounts.

All of the above potential problems can be avoided with some careful planning. Having a Will allows you to make important decisions about guardians for children as well as any wishes you might have for your funeral.

It starts with a conversation where a professional advisor will inform you about all of the available options. The team at Fortis Law are happy to help you avoid the intestacy trap. Book an appointment by calling our team today.

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