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Expat Wills

How to ensure your legacy is inherited by loved ones

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NOBODY likes to think about dying, yet it is vital you plan ahead to ensure your loved ones receive what you intended for them when you are no longer around.

The best way to do this is by drawing up a valid will, as this ensures the right people inherit your assets in accordance with your wishes.

However, intestacy (dying without a will) affects millions of people each year, with figures from the Co-operative Legal Services (CLS) showing 47 per cent of UK adults die intestate.

Without a will, it is essentially down to the Government to decide who benefits from your estate under what are known as the Rules of Intestacy.

“The risks of dying intestate are substantial,” says Emma Myers, head of wills, probate and lifetime planning for Saga Legal Services. “The rules are quite archaic and only benefit spouses or civil partners and blood relatives, regardless of your partner’s feelings towards them.

“This could mean people who you want to inherit, such as friends or stepchildren, miss out. Without a will you cannot control who inherits and what they inherit.

“In addition, dying intestate means you would not be able to leave a charitable gift, and if children are involved your family may not have a say in who becomes their legal guardian.”

The good news is that from October 1 the Government is bringing in changes to the rules to improve the system.

“The new intestacy rules will simplify how an estate is distributed in the event of someone dying without the correct paperwork in place,” says Danny Cox from adviser Hargreaves Lansdown. “But while this should make life easier for those left behind, this also reinforces the importance of having a valid will in the first place.”

What are the Changes to the Rules of Intestacy?

The Rules of Intestacy have been in place since 1925 and have not been reviewed since the 1970s.

“The rules will significantly change on Wednesday,” says Myers. “The revisions will amend the amount a spouse or civil partner is entitled to where there are no children, as well as simplifying how assets are shared where the deceased is survived by a spouse or civil partner and children.”

The changes will also provide extra protection to any surviving children from the risk of losing a potential inheritance.

Myers adds: “In addition, the new rules will amend the laws where a child dies intestate and unmarried fathers lose out.”

Here we take a closer look. What does this mean for married couples and civil partners without children? Current rules:

If someone dies intestate, the surviving spouse or civil partner would receive the first £450,000 of the estate plus interest, 50 per cent of the balance over that, and also the deceased person’s personal possessions (chattels).

The remaining 50 per cent of the balance would then pass to the deceased’s blood relatives. If there aren’t any members of the deceased’s family alive, the entire estate would pass to the deceased’s spouse or civil partner.

New rules from October 1:

Where there are no children, the entire estate will now pass to the surviving partner.

“While this does simplify the process, it means the deceased’s parents, brothers and sisters, or their children, do not inherit anything unless there is a valid will in place to state otherwise,” says James Antoniou, head of wills at the CLS.

How are married couples and civil partners with children affected? Current rules:

Where someone dies leaving a spouse or civil partner and direct descendants, such as children, grandchildren and great grandchildren, the partner would take the first £250,000 of all the deceased’s chattels.

The spouse or civil partner would also have a life interest in one half of the balance, and the children would take the other half of the balance.

A life interest means the surviving spouse is entitled to use the property, or to receive its income until their own death. At this point, the property passes to the deceased’s direct descendants (children, grandchildren and great-grandchildren).

New rules from October 1:

Under the new rules, the surviving spouse or partner still receives the first £250,000 and personal belongings absolutely.

“However, instead of having a life interest in 50 per cent of the remaining balance, they now receive this as a capital sum outright,” says Antoniou. “This means it is their own property.”

The remainder of the balance then goes to the deceased’s direct descendants.

What about unmarried couples? Current rules:

Under current rules, unmarried couples receive nothing from their partner’s estate if they die intestate, as there is no such thing as common law when it comes to inheriting.

New rules from October 1:

While initially, there had been a proposal to include cohabitees in the changes to the Rules of Intestacy, this has not been included in the agreed changes.

“This would have meant that a cohabitee would have been treated like a spouse if the couple had been living with the deceased for at least five years up until death, or if they had children together and had been living together for at least two years up until death,” says Antoniou.

“Given that this proposal is not being introduced, it is important for unmarried couples to ensure they have a valid will in place. This will ensure their assets go to the people they are intended for.”

As well as the changes set above, additional changes include:

A new definition of “chattels”.

Under current rules, “chattels” have had an archaic and arguably ambiguous definition which include “carriages”, “linen” and “scientific instruments”.

From October 1, chattels will be defined as anything that is not monetary, business assets or “held as an investment”.

Adoption

Currently, there is a risk that a child adopted after the death of their parents would lose his or her inheritance.

From October 1, the new rules will allow a child of the deceased to inherit on intestacy, even if he or she is subsequently adopted.

http://www.scottishdailyexpress.co.uk/finance/personalfinance/516362/Ensure-legacy-inherited-by-loved-ones

Publish date: 11/02/15 11:11
Source: by Esther Shaw , Published: 15:55, Sun, September 28, 2014, The Scottish Express

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