Well, it’s not always a myth.
If your only relative is your husband or wife, in the event of your death without leaving a Will, they will inherit “everything”.
But few of us have such simple family circumstances.
We recommend that every adult should have a Will.
One of the reasons why it is difficult to produce focused and convincing marketing about why folk should make a Will is because everyone’s situation is unique.
If you don’t make a Will you will die ‘intestate’, which just means ‘without there being a valid Will in place’. In intestate cases, special rules in legislation dating back to the 1960s regulate how the deceased’s estate is divided up.
The extent to which your death will result in some or all of your estate going to persons you did not expect (or want) to have claim will depend on your particular family circumstances and your expectations.
How can we convince you of the need for a Will?
The best we can do to demonstrate the uncertainties and pitfalls is give examples to show that ‘surprising’ things can happen to your estate if you die without a Will.
So here is one example.
Frank and Iona Ferguson are a married couple in their mid-fifties. They’ve both previously been married. Frank has a son and a daughter, who are both grown up. Iona has no children.
Sadly, Iona died unexpectedly in December 2019.
Apart from Frank, Iona is survived by her brother, Colin Francis, and her father, Eric Francis. Iona also had a sister, Sheena Smith, but she died in 2015, leaving two daughters, Alison and Fiona Smith.
Iona’s estate consists of the following items:
- A house (‘heritable estate’) in Forres worth £450,000 and held solely in Iona’s name.
- Various bank accounts, share interests and musical instruments (‘moveable estate’) worth £200,000.
- Her share of the contents of the Forres property, valued at £25,000 (also part of the ‘moveables’)
How is Iona’s estate divided up?
In an ‘intestate’ estate such as this, there are three main stages to go through:
• Prior rights, then
• Legal rights, then
• ‘Free estate’.
For a start, you have to total up the heritable estate and the moveable estate. The heritable value is £450,000. The moveable value is £225,000. The total value of the estate is £675,000.
Next, we consider whether there are prior rights to be claimed.
Prior rights are the rights of the surviving spouse (or civil partner) so they apply here as Iona was survived by Frank.
Prior rights are in 3 parts.
Firstly, there is the house right. The surviving spouse has the right to the deceased’s interest in the house in which the surviving spouse was ordinarily resident at the date of death, provided the value does not exceed £473,000.
The house here is worth £450,000 so it passes to Frank under the rules of intestacy.
Secondly, there is the furniture right. The spouse inherits furniture in the house in which the surviving spouse was ordinarily resident up to the value of £29,000.
The furniture here is valued at £25,000 so, again, that will pass to Frank under the law of intestate succession.
The third element of prior rights is the cash right. Where the deceased is survived by both a spouse and children, the surviving spouse has a cash right of £50,000, If there are no children, the cash right is £89,000.
It means that £89,000 of the £200,000 part of the moveable estate set out above goes to Frank. That leaves £111,000 to go into the next part of calculation, which is Legal rights.
Let’s look at that now.
Legal rights
A spouse and any children (or the descendants of a child who has predeceased) are the only persons who are entitled to legal rights.
This can only be claimed from moveable estate but, in our example, only moveable estate remains to be divided up.
Where the deceased is survived by a spouse but no children, as here, the surviving spouse is entitled to one-half of the remaining moveable estate in satisfaction of their legal rights.
So that’s half of £111,000, in other words, £55,500.
Based on the above, we can see that Frank is receiving (£450,000 (house) + £25,000 (contents of house) + £89,000 (cash prior right) + £55,500 (legal rights) £619,500 from the total estate of £675,000 up to this point.
The final part of the calculation is the division of the free estate (the remaining £55,500). Does Frank receive any part of that? Let’s see.
Free estate
After settlement of prior and legal rights, what is left of the intestate estate is the ‘free estate’. A spouse does not share in the free estate if there are children, parents or brothers or sisters of the deceased. In other words, Frank does not get anything more from the remainder of Iona’s estate.
What happens to it?
Where there are any parents or siblings, each class takes one-half (or the whole if only one class is represented).
In our example, both classes are represented. We have Iona’s father; and we have Iona’s brother, as well her nieces – the daughters of Iona’s deceased sister.
Here’s how that all divides up.
Eric Francis (Iona’s Dad) is the only person in the parents’ class. He receives one-half of the £55,500 – i.e. £27,750.
In the sibling’s class, Colin is the only surviving sibling but because Sheena died leaving children (her two daughters) they ‘represent’ her interest. So the £27,750 for this class is split £13,875 to Colin and the remaining £13,875 is split equally between Alison and Fiona.
Summary
Total estate: £675,000
Spouse: £619,500
Father: £27,750
Brother: £13,875
Nieces: £13,875 (shared between two)
Comment
In this scenario, even without a Will in place, over 90% of Iona’s estate passes to Frank. But did you expect that Iona’s Dad or her nieces would share in the remainder?
How we can help
If you have any questions about this article or about our Will-making services generally, please get in touch with us. All initial enquiries are free of charge and without obligation.
You can call one of our Private Client team on 01343 544077 or you can send us a Free Online Enquiry via this website.
It is still possible to make a Will, even under conditions of social distancing.