If you are married or in a civil partnership, do you assume that everything would automatically pass to your spouse if you died without making a Will?
Well, that isn’t always the case – it completely depends on the value of the assets you are leaving as to where everything goes.
The amount that automatically passes to a spouse (where there are no children) increased in July of this year. It went up from £270,000 to £322,000. If you don’t have children your spouse would inherit everything, no matter what the value – but if you have children it would work like this:
The spouse would inherit £322,000 plus all personal possessions.
Whatever is left would be split – 50% would be divided equally between children and the other 50% would go to the spouse.
It could also cause an Inheritance Tax issue as only the amount passing to the spouse would be tax free at that stage. If the money going to children was over the Inheritance Tax threshold there would be tax to pay!
If you die without a Will and you don’t have a spouse, then everything would go to your children – and that may be what you would want, but it’s always easier to deal with an estate where there is a Will in place.
If you have no children and there are no grandchildren/great grandchildren, but a parent is still alive, everything would go up the line to them, but that could mean it gets taxed twice – once when it passes to them and once when they die as well (if both estates are above the tax-free threshold).
If your parents have already passed away, there are other relatives who could inherit. It
goes in this order –
- siblings, and if any have passed – their children (nieces and nephews)
- any half siblings, and if any have passed – their children
- aunts and uncles, and if any have passed – their children (cousins)
- half aunts and uncles, and if any have passed – their children
If there are NO living relatives everything would go to the crown.
The bottom line is that it is always easiest for your family if you have set out your wishes in a legally valid Will. Make sure your assets don’t end up with family members you haven’t seen for years. You may prefer everything to go to charity if you have no close family/friends to leave everything to, but you can only do that if you specify it in a Will.
If you would like some help setting out your wishes in a Will, please contact us at A R K Lasting Powers & Wills – we’d be happy to help!