One million UK adults report serious family row after relative dies without a will

According to recently published research by Macmillan Cancer Support, one million adults across the UK have reported a serious family argument after the death of a relative who died without writing a will. Of this one million, nearly a fifth said that the row had gone on to cause an irrevocable change, or break down, in family relations.

The research also estimated that nearly six in ten adults across the country fail to make a will, with the majority of survey respondents stating that the reason they haven’t made such a provision is that they have “just never got round to doing it”.

One in three that took part in the survey who had drafted a will said that their existing will did not include something they had promised to a loved one, which they worried would cause a family dispute in the future, highlighting the need to update already drafted wills.

Dispelling the myths surrounding intestacy

As well as the potential to cause family rifts and disagreements, there are several common misunderstandings about how property passes when an individual dies intestate – without a will. This includes the belief that estates pass in their entirety to a surviving partner or spouse as a matter of course.

The rules of intestacy, which were updated in October 2014, are often complex and can produce unexpected outcomes, that don’t necessarily reflect the reality of family relations.

When a married person dies intestate, with their spouse or civil partner surviving, the first £250,000 of the estate – which includes all money, assets and property owned by the individual – passes to their spouse. The remaining estate is then divided between the surviving spouse and the deceased’s direct descendants – including children, grandchildren and great grandchildren. It is only where the deceased has no direct descendants that the whole estate passes to the spouse.

Where an individual is in a cohabiting relationship, but is not married or in a civil partnership, regardless of how long the couple have been together, the rules of intestacy do not pass any of the deceased’s estate to their surviving partner. If the couple have children, the estate will pass to them – but if they do not, it will be dispersed amongst wider family members in a set order of priorities under the intestacy rules. While partners who jointly own an asset will be entitled to keep their share, the result of the intestacy rules can see a family member to whom the deceased had little contact with during their lifetime benefiting from an inheritance, while their partner is left without being provided for. This situation is commonly misunderstood, with many people holding a belief in a “common law marriage”, which they mistakenly believe will protect their unmarried partner.

Further, while the rules acknowledge natural and adopted children in the order of priorities, there is no account given to stepchildren – or indeed any stepfamily members, including stepparents or stepsiblings.

Where an individual dies without a partner or children, the estate will be once more be divided between wider family members, but if no surviving relatives can be found to inherit under the intestacy rules, the estate will pass to the crown.

Effectively planning for the future

While the rules of intestacy can produce unexpected distributions after an individual’s death, which can result in family disagreements, they can be avoided by drafting a will. Wills allow an individual to set out exactly who they would like to bequeath, including close friends and charities who are not covered at all in the intestacy rules.

However, an additional advantage to setting out your wishes is the ability to consider inheritance tax implications. According to research from the find-an-adviser website Unbiased.co.uk, Britons are set to waste £550 million in unnecessary inheritance tax payments this year as a result of failing to make plans.

There are a number of methods of legally and fairly reducing an individual’s inheritance tax, including provisions that allow for tax-free gifts to be made during an individual’s lifetime, taking advantage of the combined spousal allowance and annual tax-free gift reliefs.

Contact IBB’s experienced wills and trusts solicitors today to discuss your inheritance tax and estate planning issue. Call us today on 01494 790002 or email jacqueline.almond@ibblaw.co.uk. Alternatively visit wills, trusts and probate page for more information on how we can help you.