• What happens to my assets if I do not have a Will in place?

There is often a misconception amongst many people that if they do not have a Will in place at the time of their demise their assets may end up with the government. This is not the case! In the unfortunate event an individual passes away without leaving a Will and they have a surviving spouse and children, the distribution of their estate falls within the Intestacy Rules, the rules are principally contained in the Parts 3 and 4 of the Administration of Estates Act 1925. For persons who have passed away on or after 1 October 2014, the distribution of assets of the residuary estate is as follows:-

The spouse receives all personal chattels absolutely, these include personal items but money in bank, property etc.

The spouse receives a statutory legacy free of inheritance tax (IHT) and costs plus gross interest from death until payment). If the residuary estate is worth less than £250,000, the spouse receives everything and the children receive nothing.

The rest of the residuary estate is split equally into two halves. The spouse takes one half absolutely and the children take the other half on the statutory trusts.

For Example

Andy is married to Bridget and they have two children, Claire and Daniel who are both over 18. Andy has recently passed away and his estate is worth £500,000.00. In this scenario the first £250,000.00 of Andy’s estate will pass to Bridget, the remainder £250,000.00 is split between the Bridget and Claire & Daniel i.e. £125,000.00 to Bridget and the remainder £125,000.00 is divided equally between Claire and Daniel who will get £62.500.00 each.

This is not to say that you should not have a Will is place during your lifetime. It is always encouraged to have matters in hand so that your assets end up where you want them to. This is only to ‘bust’ the myth of what happens to your assets should you not have a Will in place prior to your demise. However, there will be inheritance tax implications on which advice should be sought, and this blog is just for information on what happens to assets where there is no Will in place at the time of the individual’s demise and they have a surviving spouse and children.

by Haminder Singh Matharu - 19 June 2020




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