On the first of October, the government changed the laws governing the distribution of a person’s wealth in the absence of a will.
With the changes to these Intestacy laws making it harder for unmarried and extended family members to inherit, many estate planners are strongly advising their clients to make a will.
But what are the risks facing unmarried couples?
Many activists and lawyers had petitioned the government to make a change to the laws so that unmarried partners would inherit part of an estate if they had been living with the deceased for over 5 years. They argued that this reflected changes to modern lifestyles. Unfortunately these changes have not been brought in.
This means that even if your partner has been with you for decades, they will still be entitled to absolutely nothing if you die and opportunities to mitigate up to £130,000 of Inheritance Tax will be lost.
“If you want to be certain of where your money and belongings go after you die, the only way to do so is to make a will,” advises Paul Dodsworth of Estate Planning Solutions. “While the new laws clear up a few of the question marks over inheritance, you still lose control of your estate if you die without a will and the state does write your will for you”
Another change that could cause trouble has been the elimination of inheritance rights for your wider family, should you die without a will and without children.
Under the old laws, anything over a threshold of £450,000 would be shared with your parents, brothers and sisters. For some people, this was a comfort, especially if their relatives were elderly, disabled or infirm. Now, however, everything goes to the spouse or civil partner of the deceased.
If you have children, the new rules mean that their share of your estate drops, also, with more of your money going to your spouse. If you want to give your children a bigger slice of the pie, a will has become more essential than ever.
If you want to learn more about Intestacy law changes and how they might affect you, Estate Planning Solutions has a blog on the subject. Click here to read more or give them a call on 0800 781 6658.