New rules of Intestacy - a red herring?

If you're thinking, "Wow, this sounds exciting!" you would be wrong. That's the trouble you see, whenever we mention Wills people glaze over. It's just not exciting. But it is interesting. And if you want to see exciting, try dealing with someone's estate if they die without making a Will. Now that's when it gets really quite interesting.

Recent surveys have shown that around two thirds of people in England and Wales have not made a Will. Of those who have, many of them are out of date, invalid or just plain badly thought out. So why don't people get round to making a Will? Largely because they think it won't happen to them and also because they think it is a complicated and difficult process. They would be wrong on both counts.

Countless problems are caused when people die intestate because the assets don't always end up where you might think they would. Besides, if you have life insurance then surely you accept that the unexpected can happen. So make a Will and your assets will go where you choose rather than goodness knows where.

So what are the Goverment doing about these huge numbers of people without a Will? Well, they are changing the rules of intestacy as of 1st February 2009. These are the rather complex (some would say confusing and unfair) rules on what happens if someone has died without making a Will (intestate).

From this date, if a person dies intestate leaving children (who may be grown up) behind, their spouse or civil partner will receive the first £250,000 of the estate, instead of the previous rule where they would have received £125,000. They also receive the personal belongings and a life interest in half the remainder.

If the person dies intestate and doesn’t have any children, but has a close relative - a parent, brother or sister, niece or nephew - their spouse or civil partner will receive the first £450,000, instead of the £200,000 under the old rules. They will also receive the personal belongings and half the remainder.

All other aspects of the rules remain the same. And they are even more confusing!

Great news I hear you cry, we won't need to make a Will now. And there's the red herring in these new rules. Even when she announced the changes, Justice Minister Bridget Prentice admitted that the changes were no substitute for making a Will.

Why? Take your pick from this list of what happens if you die intestate:

• If you are not married your partner gets NOTHING
• If you have children under 18 a Will is where you appoint Guardians for them and trustees to look after their money; if not you cannot be certain what will happen to them
• A Will is where you gifts or legacies to loved ones or charities - no Will, no gifts for anyone to remember you by
  
• Children may inherit a significant amount of money at the tender age of 18
• And anyway, would you leave everything by choice to your spouse? What if they remarry after you have gone, can you be sure that those assets won't be lost?

When you have a Will written professionally it can serve to proetect your assets for your children no matter what happens to your spouse after you've gone.

Finally, a well written will using trusts may help you to avoid care home fees and Inheritance Tax in the future, especially if you own a business or a farm.

So, still think you don't need a Will?

Stephen Wilkes
Silver Lining Estate Planning Ltd
www.silverliningep.com
01394 421092