Probate: Why making a Will matters

Dealing with the death of a loved one is never easy and managing their financial affairs and assets after they’ve passed can be difficult, especially when emotions are high or if there are conflicts in the family.

We wrote a blog in June about the need to have a valid Will, but we only briefly touched on how they help with the probate process.

Here, we explain more about probate so that you can better understand what happens when a person dies without a valid Will in place.

What is probate?

Probate is the name given to the legal process that happens when someone dies.

If the deceased person made a Will, a solicitor would first determine whether it is valid. If it is, the nominated executors apply for Grant of Probate. This gives them authority to pay any taxes and debts before distributing the deceased’s estate as per the instructions set out in the Will.

If the person died without making a Will, or with an invalid Will, this is known as dying intestate. This means assets are divided up as stated by the law, not necessarily as the deceased would have liked. It also makes probate longer, more complicated and more costly.

What happens when someone dies intestate?

If someone dies without a valid Will, their estate is distributed as per the rules of intestacy. This means that someone who expected to inherit may not, and someone who the deceased or their family feels should not benefit, may be entitled to a share.

Rather than an executor applying for Grant of Probate, a probate court issues a Grant of Letters of Administration to people who apply for authority to deal with the estate. These are usually beneficiaries and there is an order in which applications are considered, beginning with the spouse or civil partner then the children of the deceased. A Grant of Letters of Administration essentially gives the same rights as a Grant of Probate but adds unnecessary expense, time and complication.

Even with a Grant of Letters of Administration in place, the estate must still be divided up as per the rules of intestacy, so we’ve covered that below.

What are the rules of intestacy?

The rules of intestacy currently state that the person’s spouse or civil partner (even if they’re estranged) inherits all of their possessions and the first £270,000 of their estate. If the estate is valued at more than £270,000, the remaining inheritance is divided with the spouse or civil partner inheriting the first 50% absolutely of the estate valued more than £270,000. The remaining 50% is shared equally between any children.

This means that cohabitants, stepchildren (unless adopted) and grandchildren will only inherit if there is no surviving spouse/civil partner or children, which may not be what the deceased person or their family would have wanted. It also means that charities and causes close to the heart of the deceased will not benefit unless a gift is made by a family member from their share.

Can I contest the rules of intestacy?

If you’re not provided for, for example if you lived with the deceased but were not married or in a civil partnership or if you have inherited but feel you should have received a larger share, you can make a claim under the Inheritance Act 1975. This is a lengthy, costly and stressful process with no guarantee of getting your desired outcome.

You can give up all or part of your own inheritance with a Deed of Variation if you want to make the distribution of the estate fairer, minimise inheritance tax or ensure someone not covered by intestacy rules is provided for.

An estate passes to the Crown If there are no relatives able to inherit under the rules of intestacy.

Does dying intestate mean a bigger inheritance tax bill?

Inheritance tax is a complicated area, but we have known cases where estates shared by the rules of intestacy are subject to more tax. This is because the law dictates who inherits what, whereas a person making a Will may include it in their financial planning and minimise what needs to be paid on their death.

Our recommendations

We recommend making a Will with a solicitor and keeping it up to date. This will ensure your personal and financial assets are distributed to those you want to benefit, and stress and uncertainty for the loved ones you leave behind will be minimised. They’re usually cheaper and quicker to create than people imagine, and you can include other details such as wishes for your funeral and who you would like to care for children and pets.

Everyone should make a Will, but we emphasise that cohabitants are at risk of not inheriting unless they’re married (and the marriage must be lawfully recognised, which not all faiths are) or in a civil partnership. In the eyes of the law, it doesn’t matter how long you have been or couple or even if you have children together, there is no such thing as a common-law marriage giving automatic legal rights over a partner’s estate.

We know from experience that families often disagree over who should inherit what but, if your wishes are clearly laid out in a Will, relationships are less at risk of breaking down through jealousy and arguments.

Remember verbal promises mean nothing in the court, but a Will is a legally binding document for which there is no substitute.

Call us on 0116 340 0094 or email to find out more about our Will writing service.