Understanding the intestacy rules - who inherits if you die without a will?

Understanding the intestacy rules – who inherits if you die without a will?

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A will is just a document that says what you’d like to happen to your possessions and money after you die, and who should look after your children. It can be short and simple or lengthy and detailed. And it can include information things such as the type of funeral you’d like. But you should have one.

Who inherits if you die without a will?

If you don’t have a will, you die intestate. When that happens, the proceeds of your estate, which is basically everything you own (including savings, investments and your home), will be divided according to the law.

It also means people you want to inherit money or things you own when you die may not benefit. If you don’t have a will, everything you own will be divided according to a specific set of rules called intestacy rules. One set of intestacy rules covers England and Wales another covers Scotland (where they’re called ‘prior rights’ and ‘legal rights’).

ENGLAND AND WALES

In England and Wales, if you die without a will and are married or in a civil partnership, these are the basic rules of intestacy (please note that the law changed on October 1st 2014 and this article reflects the situation after the law change):

If you have no children or grandchildren:

  • If you have a husband, wife or civil partner he or she will inherit everything. It doesn’t matter whether the property and money that someone leaves behind is worth £200,000 or £2 million. The husband, wife of civil partner will inherit it all if there is no will.

SAVVY TIP: This is a change from the situation before October 1st, when husbands, wives or civil partners only inherited money or property worth up to £450,000. If the estate was worth more than that, the rest (apart from personal possessions) passed to the deceased person’s parents or brothers and sisters.

If you have a child/children or grandchildren:

  • If you have a husband, wife or civil partner and the money and property you own is worth up to £250,000, in that case your husband, wife or civil partner will inherit everything. (This is the same as under the old law).
  • If you have a husband, wife or civil partner and the money and property you own is worth over £250,000, your husband, wife or civil partner will get the first £250,000, plus personal possessions and half the remainder. The other half will be split equally between the children, although they will have to be 18 years old before they can spend/access the money.

SAVVY TIP: Under the old system, your husband, wife or civil partner would have received the first £250,000 plus personal possessions and a ‘life interest’ in half the rest (which basically means any interest or income generated). The other half went to the children – held in trust until they were old enough.

SCOTLAND

In Scotland, if you die without a will and are married or in a civil partnership, the basic rules of intestacy are different to those in England and Wales:

If you have no children:

  • If you have a husband, wife or civil partner and the property you own is worth up to £473,000, your husband, wife or civil partner will get the value of the property plus furniture and furnishings up to £29,000, plus up to £89,000 of money.
  • If you have a husband, wife or civil partner and the money and property you own is worth over £473,000, your husband, wife or civil partner will get the value of house to £473,000 plus furniture and furnishings up to £29,000, plus up to £89,000 of money.

If you have a child or children:

  • If you have a husband, wife or civil partner and the money and property you own is worth up to £473,000, your husband, wife or civil partner will inherit the value of house plus furniture and furnishings up to £29,000, plus up to £50,000 of money, shares etc.
  • If you have a husband, wife or civil partner and the money and property you own is worth over £473,000, your husband, wife or civil partner will get the value of house to £300,000 plus furniture and furnishings up to £29,000, plus up to £50,000 of money, shares etc.

Related articles:

When can you challenge a will?

How can you cut your inheritance tax bill?

10 ways to make sure your will isn’t challenged

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