What happens if you die without a Will?

Most people think that when they die all their assets automatically belong to their husband or wife but that may not be the case. If you die without making a Will your assets are divided up according to the intestacy rules, which set out a strict order of relations who will inherit your worldly goods.

In England and Wales, if a spouse dies intestate and their estate was worth more than £125,000 at their death, their spouse (or civil partner) would only get £125,000 and a right to use half of the remainder during their lifetime. The balance would be divided between their children, or if they had died, their grandchildren.

If there are no children or spouse the situation is worse, as without a Will the parents get the residue of the estate, which may well push the total of their assets over the inheritance tax (IHT) exemption threshold of £300,000. This could create a tax charge on the parents’ deaths where none may have existed before.

In Scotland and Northern Ireland similar concepts apply, although the exact details are different to those in England and Wales.

Only those who are legally married, or same sex couples who have registered a civil partnership, have any rights to their partner’s assets on death. If you are not married and don’t have a Will or life insurance arrangements, your partner will receive nothing on your death, even if you have been living together for years and have children together.

If you have a properly written Will, you can make gifts to whoever you wish to, free of IHT, if the total value of those bequests is less than the IHT threshold of £300,000. The balance of your estate can be left tax free to your spouse, although there are limits on the tax free amount a non-domiciled spouse can receive.

If you would like any help with arranging your tax affairs to mitigate the effect of IHT, please contact us.