Latest statistics from the Law Society has revealed that the majority of people in the UK do not a have a Will. Results showed that a staggering 73% of 16-54 year olds do not have a Will, whilst 64% of over 55 year olds do. In addition to this, men are also more likely to make a Will than women.
The main reason given for not making a Will, is that they believe they have nothing of any value to leave. However, many people forget to account for their property when adding up the value of their estate.
Out of those who have a Will set in place, 47.2% stated that their reason for making a Will was due to the fact that they were now old enough or realised the negative impact by not having one. Many people were also revealed to have made a Will as a result of a divorce.
Divorces are often a common reason behind people creating a new Will or changing a Will through a Codicil.
Dying intestate (without leaving a Will), can often be a nightmare for the family members involved. As many as 23% of those surveyed believed that if they passed away without making a Will, their estate would automatically go to their family. This however is incorrect as in some cases intestacy rules will determine who inherits what. In some cases, the state may be entitled to the estate. In 2014, around £8m was received by the government due to those passing away without an estate.
So what are the Intestacy rules?
If you pass away without leaving a Will in both England and Wales, your property will be divided and distributed under the intestacy rules in the Administration of Estates Act. These rules were updated after new regulations came into force on 1st October.
If you are married or are in a civil partnership and you have children, the surviving spouse/partner will receive everything including personal possessions up to the value of £250,000. Anything above this value is then divided equally between the children when they reach 18 years of age and the spouse/partner.
If you are married or are in a civil partnership and you have no children, the surviving spouse/partner will receive everything.
If you are unmarried and have children, your children will receive everything once they reach 18 years of age. If you are cohabitating, your surviving partner will get nothing.
If you are unmarried and have no children, your estate will go to your relatives in the following order:
- brothers and sisters (if parents have passed away)
- grandparents (no brothers or sisters)
- aunts and uncles (no grandparents)
- the crown (no living relatives)
Making a professional valid Will can also reduce the amount of inheritance tax you will have to pay. Inheritance tax, is the tax payable on a property once you pass away. However, some can be passed on tax-free via the 'nil rate band'. The nil rate band for 2015 is £325,000.
Married couples and civil partners can pass on their property to each other tax-free. As from 2007, the surviving partner can use both tax-free allowances, providing one was not used at the first death. This means that the amount the surviving partner can leave behind is tax free up to £650,000.
If you're thinking of making a Will, the LawStore can help you! The LawStore offers a wide range of affordable and easy to use legal documents regarding your Will. For further information simply click here. If you would like to speak to an expert in regards to making or changing a Will call us on 0845 603 6544, for further information and advice.