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If you’re planning on leaving everything to your partner when you die, making a Will might seem unnecessary. Most people assume that, without a Will, their partner will automatically inherit everything anyway. Sadly, that’s often not the case. The rules on intestacy are complex – and there are also issues with leaving everything to your partner that you might not have thought of.
The rules of intestacy
‘Intestacy’, or dying ‘intestate’ means that you didn’t make a valid Will before you died. In those circumstances, your estate would be distributed in accordance with the ‘rules of intestacy’.
If there are no children, grandchildren or great grandchildren, your spouse or civil partner (if you were married to them / in a civil partnership at the time of death) will inherit your entire estate, including all of your personal property, belongings and wealth. If your spouse / civil partner was informally separated from you, they can still inherit.
If you were divorced / the civil partnership was dissolved, they cannot inherit. If you and your partner were just cohabiting, they will not be able to inherit under the laws of intestacy either (although they may still be able to get help – see below).
If there are children, grandchildren or great grandchildren, your spouse or civil partner will inherit all your personal property and belongings, the first £270,000 of the estate, and half of the remainder of your estate.
The rest goes to your children or grandchildren, depending on a number of factors.
If you own your home as ‘Joint Tenants’ rather than ‘Tenants in Common’ with your partner, your partner will automatically inherit your share of the family home on your death. The same applies for joint bank accounts and other jointly owned property. The automatically inherited property does not count when calculating sums under intestacy rules. However, leaving your family home or assets to your partner this way can cause a lot of problems – see ‘When your partner inherits everything’ below.
Applying for help from the court
If you die intestate and someone close to you has no right to inherit from your estate under the rules of intestacy, they can still apply to the Court for financial help. The Court can award regular payments, a lump sum or the transfer of property (such as the family home) from your estate, if they deem it appropriate. Not everyone has the right to apply – for example, if the person has been cohabiting with you, they would need to have lived with you for at least two years immediately before your death to be eligible.
The fact that people can apply to the Court for a share in your estate is one of the very good reasons why it is important to make a Will. Those applying to the Court may not be who you would have wanted your assets to go to – and it may mean that the people you care about most are worse off financially as a result.
When your partner inherits everything
If you own your home as ‘Joint Tenants’ and your partner automatically inherits it, this can cause a wide range of problems.
First, if your partner should need care in the future, the Local Authority can take almost everything they own – including the share of wealth that they inherited from you – until there is just £14,250. Once their assets have dwindled to £14,250, the Local Authority will take over paying for the care.
Secondly, if you die and your partner remarries, their new partner could end up with your share of the wealth – either because your partner remakes their Will or because they also die intestate. Your children or grandchildren could see very little if any of your share.
These problems can be avoided by ensuring that you own your home as ‘Tenants in Common’ rather than ‘Joint Tenants’ and by making a special type of Will which puts your assets into a trust.
A trust is a way of managing assets (which may include the family home, other properties, money and investments) for people. There are three types of people involved with a trust:
- the ‘Settlor’ – the person who puts assets into a trust – i.e. you;
- the ‘Trustees’ – the people who manage the trust – you choose who; and
- the ‘Beneficiaries’ – the people who benefit from the trust – for example, your partner, children or grandchildren.
With a trust, you can specify that your partner will be able to use the family home on your death but once they die, it will go to who you have chosen – your children or grandchildren, for example. Your partner can move home with the permission of your choice of trustees, but they cannot simply sell the home and take the money.
The benefits of a Trust Will
There are many benefits to creating a trust using your Will. If, for example, one of your children goes through a divorce, ordinarily any inheritance might be split with their ex spouse/civil partner. Alternatively if they run into financial difficulties, their creditors may want to take the inheritance to pay off their debts. You can prevent either of these scenarios by putting the property in trust – so for example, you can specify that your partner gets use of the home during their lifetime, then your children, then your grandchildren, and so on. Since the property never belongs to the children – they only get use of it – it cannot be taken by their creditors, ex partners etc. The trust can last for up to 125 years if you choose, allowing you to truly keep your property in the family! Speak to our team about the many benefits of arranging your affairs this way – or order our free information pack, without obligation.
Get in touch
We have prepared a free, helpful information pack explaining more about ‘Joint Tenants’, ‘Tenants in Common’ and Trust Wills. Fill in your details below to receive your pack. You can also call us for your pack on 0800 788 0500 or email firstname.lastname@example.org.
We have locations across the UK and we can also cater for home visits. We would be happy to review your current situation with you, without obligation. Just call us on 0800 788 0500 or email email@example.com to make an appointment with your nearest office.