Guide

The consequences of dying without a will

Gateley Legal

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In this episode, host Catriona Attride is joined by legal director Fiona Debney to discuss the importance of having a will and the consequences of dying without one.

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In this episode:

  • We define what it means to die intestate;
  • We outline what is inherited by a partner or spouse if a partner dies without a will;
  • We outline what happens to your property if you die without a will;
  • We outline what is inherited by children if a parent dies without a will;
  • We look at whether a cohabiting partner has any rights to a property when a partner dies;
  • We define intermeddling; 
  • We outline who has the right to sort out an estate in an intestacy;
  • We explain the importance of having a will if you are in a second marriage; 

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This episode is part of our Talking family and wealth podcast series. Learn more about the series and what we cover. This podcast is available on iTunes, Spotify and Soundcloud.

Read the transcript:

Catriona Attride: Welcome to Talking Family and Wealth, your straight-talking guide to dealing with matters that are at the heart of the family in terms of planning for the future and protecting assets, and resolving difficulties that might arise in family relationships. My name is Catriona Attride, and I am a private client lawyer with over 20 years of experience supporting clients in their estate and tax planning. In each episode, I'll be joined by an expert, and together we'll lift the lid on how best to handle everything from inheritance to divorce. Along the way, we'll share some of the situations we've encountered. Some good, some bad, and many ugly, but all useful in helping you to protect your family and wealth.

Today, I'm joined by Fiona Debney, a legal director in the private wealth team at Gateley who works with me on estate planning, and we're going to have a chat today about the importance of having a will from the perspective of what happens if you don't have one. So welcome Fiona.

Fiona Debney: Hello, Cat. How are you?

Catriona Attride: I'm good. You?

Fiona Debney: Excellent. Not too bad, thank you.

Catriona Attride: Good. So you ready to have a chat about what happens when things go wrong in the sense of people not having wills? I know I've got a few stories to share.

Fiona Debney: Yes, so do I, so yes, this should be quite a good discussion.

Catriona Attride: Good. I think if we start from first principles, a will is a document that you prepare during your lifetime and which sets out your stall in terms of where you would like your assets to go, if and when you die.

Fiona Debney: That's correct.

Catriona Attride: And if you don't have a will, then you're set to die intestate.

Fiona Debney: That's right, and all intestate means is without a will.

Catriona Attride: And there are then set rules that determine where your assets pass, which can get quite complicated. So the scenario where you've got a spouse and children, what happens then?

Fiona Debney: Okay, so first of all, the spouse can also mean someone that's in a civil partnership, so we'll include that as well. If your spouse or civil partner dies without making a will, then you do not automatically inherit everything, which is a very common myth out there. You are given what is called a statutory legacy, and that is the first 270,000 pounds of the estate. Now that sounds quite a lot, but that actually also takes into account the value of the property that you may co-own with that person. So probably not that much at all when you take into account how houses are actually worth now.

Catriona Attride: Although if you own the house as tenants in common, that would be the issue. If you were joint tenants, then you would get away with it, wouldn't you, because [crosstalk 00:03:08]?

Fiona Debney: That's right. So two ways of owning.

Catriona Attride: Yeah, so if your house automatically passes to the surviving owner, then probably no harm done, but if you hold it differently than that, it's definitely going to be an issue. So what happens to anything over the 270?

Fiona Debney: In our scenario we're saying that there are children, so the remainder is then split in half, and half goes to the spouse or civil partner, and the other half is shared between whoever the children are. Those children-

Catriona Attride: at the age of 18, isn't it?

Fiona Debney: Absolutely. They don't get it until they're 18. Which some people may also think is too young, but that is when they are then entitled to it.

Catriona Attride: Yeah, absolutely. And where you haven't got a spouse. So if, for example, you are a cohabiting couple, then it's right to say that you don't have any rights, do you, as the surviving partner?

Fiona Debney: That's right. Again, there's an urban myth of, if you are cohabiting that you are common-law husband or common-law wife and that quite simply does not exist at law, and you do not inherit under the intestacy, which means that you're left trying to make a claim against the estate, which you might not want to do, because effectively, what you could be claiming against then is your children. Doesn't feel very nice.

Catriona Attride: No, and we've definitely seen that. One of the cases, actually, that I was going to mention here, it was in this situation, but where a couple had been together for, I think, 30 years, and they had never married, never felt the need, and there were no children of the relationship either. And neither of them had children from previous relationships. And they lived in the man's property. It was in his name. And he then died, which then left my client, the lady, in a position where she had no rights under the estate, and the beneficiaries under the intestacy rules were his parents who were in their late 70s, maybe even early 80s. And the complication with that was that it was left to parents equally, but his mum and dad had separated when he was quite young and he has had no relationship with his father his entire life, and then all of a sudden his father was in for half his estate.

And unfortunately, there were quite difficult circumstances around his death and things that followed, and the mother was adamant that she wasn't going to let our client have anything, even though this was her home. And quite early on the father did agree actually to essentially give some of his interest to her. Not all of it. He still wanted to have some money. But we then had to make a claim under the Inheritance Provision for Family Independence Act, which is really the only hope for a cohabiting spouse. Sorry, a co-habiting partner. Because once you've been living with someone for two years, you're treated almost as a spouse for the purposes of being able to make a claim where you're financially dependent.

But our client had to go through... We settled before trial, but she had to go through all of that trauma because he hadn't done a will to give her even an interest in the property, even if she could only use it for the rest of her life. He hadn't done anything and it left her totally exposed. And I think unmarried cohabiting partners, in a situation where particularly one owns the property and not the other, don't realize how exposed they are leaving their partner.

Fiona Debney: I agree. And I think it also gets clouded where people have these long-term relationships and usually the woman then adopts the name.

Catriona Attride: Well, actually it's funny you say, [crosstalk 00:07:24]-

Fiona Debney: They look like they're married. Everyone assumes they are married. And that just adds to the whole misunderstanding that's out there, that they will be looked after and they won't.

Catriona Attride: And the problem is that you're then at the mercy of the beneficiaries under the intestacy rules to frankly do the right thing. And unfortunately, because more often than not, you can only imagine the grief of losing your child, so they've got all that going on and then this, so it then just makes the whole thing even more difficult for the parties that are left behind.

Fiona Debney: Absolutely. And this goes as much for not having a will as having a will that is badly drawn up or one that you've badly done yourself that doesn't follow the rules properly. Because again, it could then be interpreted as if there was no war because it doesn't work, it doesn't fit with the rules. And I've had one where the people that inherited had had nothing to do with the deceased at all during this whole lifetime because they were remote cousins that lived in Australia, and the people that he had tried to put into his will under a homemade will be the people that had cared for him and looked after him, and the people in Australia were not interested at all in saying, "Yes, please give them some of the money."

Catriona Attride: I've had really similar things where you've literally got somebody who has never... Didn't even know they had these relatives and then all of a sudden they are in for a share of the estate and the people that are very entrenched... And it's a little bit like having a lottery win, isn't it? You can understand it from their side, but I do think it's very difficult, particularly when there is evidence that the deceased has tried to provide for that person. I think that's the really tricky bit.

One of the other ones that really sticks in my mind was a lady, and she had actually had a will prepared by a solicitor, but it was not prepared very well. I think it is fair to say that sometimes solicitors don't specialize in this area and therefore can make a bit of a mess. And ultimately the residue ended up having to pass on... The residue being the estate, what was left after some specific gifts, ended up having to be dealt with on the intestacy rules. And what was discovered after this lady died, was that her father wasn't who she thought it was. So it all came out. That mother's side we could work out because what we had to do was go down mother's route and then down father's chain for the estate, and it then came out that actually her father was married and had his own family, and none of his family knew about this relationship. And this lady was in her early 50s when she died. This had all happened a long time ago.

And then what you end up doing is, as the people dealing with the estate, is you kind of go in and put a bomb in this family because you're then contacting them to say that you've got a sibling and you're entitled. And that is awful. I mean, this lady to be fair to her, had thought she'd done all the right thing. She puts in place a will, she didn't actually know about her parentage herself, but it was the ramifications afterwards. But actually, that was an interesting one as well, because even though these people were then very angry with the situation. They again would not respect their wishes that she had left and wouldn't agree to vary the will so that the right people could... Well, the people that the deceased had intended would get the well, and unfortunately, it wasn't enough there for the solicitor to be held responsible. It wasn't great, but it was okay. And from that point of view, it wasn't quite negligent. So again, this really does blow open families.

Fiona Debney: It does. You mentioned vary the will there, and just to clarify that that's where there's a two-year window of opportunity from the date of someone's death to effectively go back and rewrite parts of will or to rewrite the intestacy rules, so as to direct the estate to someone else other than the person that should be receiving it under the terms of the will or the rules.

Catriona Attride: Yeah, and it's basically just treated as though the deceased had done it in the first place.

Fiona Debney: That's right. That's right. So yes, intestacy can also then put you to proof. So in your instance, someone didn't know about their father, but you also then have instances where someone has been treated as a child of the family, but blood tests and everything else then, again, suddenly prove that they weren't.

Catriona Attride: And in fact, we had a case like that ourselves. There was actually a will in that situation, but the will was left to the children of the deceased, and then a while later another person came forward and said that he was that the deceased's child, and he had been treated as a stepchild, and we knew that, but that didn't mean he was included in the will, and he was an adult, so he didn't have any claim. But he then insisted that he was the biological child, but couldn't provide any evidence, and it was really difficult for the rest of the beneficiaries because there were costs incurred in having the discussion with this person. But we had to make sure that he wasn't a beneficiary and there were DNA tests and everything else. You have to be really careful, don't you, because have to make sure you get the right people.

Fiona Debney: That's right. That's right. Because whoever is dealing with the estate has to make sure that it passes properly. Otherwise potentially they themselves are liable to someone if they come along and can prove that they are the right person.

Catriona Attride: We've been contacted about one recently, actually, which highlights the issue around who actually has the right to sort out the estate in an intestacy, because obviously you've got your list of beneficiaries and those people that are entitled, but until you find those people, what happens then? And the situation I was contacted about is such that the gentlemen has died and he is originally from Ireland, and all his family are in Ireland, but he's been here since the 70s and has had nothing to do with his family the whole time he's been here, and no one really knows what happened, but he was always very clear that he didn't want anything to do with his family. And he has passed away and his friend who actually dealt with the arrangements after he had died are now under the impression that he might not have had a will.

So what we have said is that you need to see if there is a will, because that is your starting point, and I've pointed them in the direction of Certainty Will Register. There is a system where people can register their wills, and although it's not widely used, the other service that Certainty offer is contacting firms of solicitors who possibly would have done a willful that person, so within the geographical area, and you can pay right to run a search, and they put a call out if you like, and normally firms will then check their records and see if they have a will. So that's what this chap's going to do. But very awkwardly he's been told by the funeral director that he should go to the bank and stop the gentleman's accounts. And of course, this chap has got no authority, as far as we know, and that then gives us an issue with what we call intermeddling. Do you want to mention that, Fiona?

Fiona Debney: So intermeddling is where, for instance, you might go to the bank and they might very well pay the funeral director's fees, or you might pay and deal with a gas bill on behalf of someone, and at that moment in time, you have intermeddled, you've been involved financially to such a degree in the estate that you are assuming all the rights and responsibilities of the person that then deals with the estate going forward. And if you are not that person, it puts you in a very awkward position.

Catriona Attride: Absolutely. And assuming in this chap's case there is no will, they're then in a really tricky situation, because actually who do they then get to sort of babysit the estate if you like, until you can find beneficiaries? So we have said that we will look at whether that is something we would get involved with. But this is often where you don't know that there are beneficiaries. It could be that all his family in Ireland have died and there's no one left. And then you end up in a situation where it becomes bona vacantia.

Fiona Debney: That's right, and that means that it ends up with the crown and the crown solicitors, and there is a lengthy process that they go through if they are dealing with an estate. But part of that also then brings into play... Most people are very familiar with heir hunters on the television, et cetera.

Catriona Attride: Is that still on TV?

Fiona Debney: I think it's on repeat somewhere.

Catriona Attride: Oh, okay. On Dave or something.

Fiona Debney: Yes, absolutely. And one of the most popular articles on our website, one of our blogs was on what do you do if you're approached by an heir hunter? What should you do if someone comes to you and says, "We believe that you are a beneficiary under the terms of a will? We're trying to trace everybody, are you this person and do you know this other person?" So there is an industry that is helpful because they are genealogists and they can track people and track missing relatives, but of course, it does incur a fee. They run it as a business.

Catriona Attride: It does, and it really varies. It varies from company to company. And actually a colleague of ours, her father-in-law was contacted by one of these people a few months ago. But the mistake they made was that they gave the father-in-law the name of the deceased. So after we had a conversation and I talked about how it works and everything else in the process and whatever, they went onto the government website, and they have a list of all the estates that look like they can't find beneficiaries, et cetera. And then as long as you can prove your family link to that person, you then can then become the person who administers the estate and deals with it and everything else. So actually the heir hunters aren't always quite so clever, because they'll have lost out on a bit, but the fees can be quite high, can't they? I mean [crosstalk 00:18:52].

Fiona Debney: I've seen 5 to 20% of what you might inherit. And the problem is at the time you signed that agreement, you don't know how many beneficiaries there are or what that person had in the estate. So 5% of a million pounds, you might be quite happy to inherit and pay those fees. 5% of 250 pounds, you might think, "Well, that's quite a lot to lose out of a very small amount of money."

Catriona Attride: Yeah, absolutely. [crosstalk 00:19:25]

Fiona Debney: But you don't know.

Catriona Attride: Yeah, and I think... Again, you'll have seen a [inaudible 00:19:26], some of the intestacies that we will have dealt with, you do have to get family trees prepared. So quite often what we will do is we will employ a genealogist to actually prepare the family tree. And because what you're doing is, when you get to the situation where there are no parents, there's no aunts and uncles, there are no grandparents, there's no... You you're getting down the line because perhaps they were all quite aged, you then end up splitting into big, big branches of families. And I think the biggest number of beneficiaries we ever had on an estate was 143.

Fiona Debney: Wow. I can't beat that. I was going to say 96.

Catriona Attride: [crosstalk 00:20:06] race you. But I mean, we ended up with... We had to run a spreadsheet with formulas in it because also it wasn't just 143 divided equally. Some people had a 25th share, some people had an 8th share. So depending on where you fell in the tree depending on what share you get, and actually working out was horrifically complicated. And then the cost of administering that, because you've got to communicate with all those people and make payments to all those people. It makes things really complicated. And ultimately it's not what the person who's died ever wanted.

Fiona Debney: I think some of it is because... People do not make a will because they're afraid to, say there is an element of [crosstalk 00:20:56]-

Catriona Attride: They think they're going to die, don't they?

Fiona Debney: Yep. It's adulting, And we don't like adulting. It's part of your paperwork and your home jobs, which we all put on the kitchen table and walk past every day and think, "I'll get around to that," and we never do, because there's always something else. And there is also a... Some people very much, I think, have the attitude of, "It'll be all right and I won't be here to see the aftermath." But when we deal with the upset aftermath, the upset people and the "Why didn't he think about me and make provision for me," or something like that, it does make you realize that it's practically important, but it's emotionally important as well.

Catriona Attride: Yeah, I think so, because I just think going back to that case I just mentioned, we've recently contacted someone with the chap with the family in Ireland. They were really close to him. He had always talked about leaving his property to one of the family members. So it then leaves you with a, "Well, what if? Why did you say that if that wasn't what you were going to do?" I think sometimes people think that it can just happen, that someone can just come in and give it to whoever they want, which obviously isn't the case. But it's also left this family, very, very close family friend with a sense of responsibility in terms of, "Well, I can't just leave it all here and just let it sit and rot until someone picks it up." So I think it leaves quite a burden on the shoulders of those who were close to the people. And I think it is a particular issue with unmarried people without children.

Fiona Debney: I agree. And I also think that when you are in a second marriage, it becomes even more important because you need to make sure that you are protecting what you've come to that second marriage with if you're not intending to share it amongst that new relationship. And I also think with the advent of online investments, online bank accounts, again, you are then leaving the problem of who does it go to and actually what have you got? And it just compounds a problem to a greater extent, and I think that the most complicated one that I ever had also included a beneficiary who had had gender reassignment. And that just caused terrible issues. Half the family were supportive, the other half weren't, and it caused terrible issues was that person actually entitled to inherit because the will had said my son and my son was now my daughter because gender reassignment reassigns your gender as if you were born in that new gender. So whilst it was a will, there was a big question about whether that part worked or not and what would happen if it didn't.

Catriona Attride: And what was the outcome?

Fiona Debney: The outcome was that luckily we were able to come to a compromise with all of the family and they did inherit what dad had intended.

Catriona Attride: So you didn't actually have to test the point?

Fiona Debney: No, but it was something we did have to talk to our client about at the time, and that was very upsetting.

Catriona Attride: I think it's difficult. I think what all this highlights is that there might be an uncomfortable conversation and it might feel difficult to put in place a will and discuss it, and I think that's where you and I, Fiona, do feel quite passionately about why we do what we do, because we do see the importance. We see the damage it can cause if people don't get this right. And I think what we would both always encourage people to do is invest that time, invest that money in taking advice and putting in place a will. And whilst I would always say there is no such thing as a simple will, because I think there is a lot which we will talk about in another podcast about the things you can do with a will that can be very protective and flexible, a very straightforward, simple, "I leave it all to X" is always going to be 100% better than not having anything at all.

Fiona Debney: And I think going to a solicitor doesn't mean that you have to go in with all of your ideas ready. Part of the skillset that you and I have to have in our job is to talk people around complex issues, and we both sit down with families and talk about those issues. And quite frequently, we'll raise something and leave the room, let the family talk about it, and they can all go, "Solicitors, hey." But it's an issue that has to be raised, but because we've raised it, it makes it easier to broach as a family.

Catriona Attride: And I think that's really important, actually, because it can be really... There's lots of online options for everything these days, and you can fill in a questionnaire and answer some questions and something can be produced for you. But the reality is that you want to find somebody who is going to advise you. You want somebody who is going to steer you in the right direction and tell you actually what is best for you, what will be fit for purpose. If you come in and just sit there and say, "I want to do this, I want to do that, I want to do the other," and we just blindly follow that, we are doing you a disservice. And you and I both have come to have to, when someone has died, have to administer a will prepared by someone who has done that.

I'm dealing with one at the moment which involves lots and lots of farmland in different areas, and everything has been carved out and put into different pockets. None of it really works, but because the client obviously had in his mind a view of what he wanted to achieve, the person who did the will at the time has just said, "Okay, I'll just write down everything you've said." And we are not doing our jobs properly if we do that. It is for us to challenge you and say, "Right, that's what you want to achieve, but this is how we recommend you get there."

Fiona Debney: Yes. Or, "Have you thought about X?" Or, "That may be what you think you want, but do you realize that it has the following implications [crosstalk 00:27:35]."

Catriona Attride: It can even be down to where the tax falls, because from an inheritance tax point of view, people can pass the first 325,000 pounds of their estate free of inheritance tax, gifts to spouses are free of inheritance tax. But sometimes what people will do is they will mix and match and they will leave some bits to some people, and sometimes they'll say whether that gift is meant to bear its own tax or not. And then it depends on where the tax falls and it doesn't always fall in the right place, so it could be that there is a residuary estate with an exempt beneficiary and the tax then ends up having to be what we call grossed up, which we won't go into now, because that will literally send everybody to sleep, but it can make the tax really complicated. So again, structuring the will in a way that benefits everybody can only be achieved if you've got somebody who can really sit down and understand your objectives, but also knows how all the stuff behind the scenes works.

Fiona Debney: Absolutely. If people ring up and say, "Can you do a will for you," the answer to that is, "No, I can do your will." It's not a will. But the devil is in the thought process. And we might make you very uncomfortable in that thought process, but it means that whatever you come out with at the end suits exactly what you want. It's about having difficult conversations and challenging people and challenging assumptions so that they make properly informed choices.

Catriona Attride: And a lot of the time that we spend is in discussing what goes into the letter of wishes that accompanies the will. So most of our wills actually are straightforward in the sense that they don't say a lot of detail in them. They have very flexible trust provisions in them, which then allow decisions to be made at the right time so you don't need a crystal ball when you're writing a will, but what you're putting in your letter of wishes is how you see it evolving, how you see it working. and you can be quite specific in there in terms of what you want to achieve. And I think that the advantage for clients often in that is that it gives them the opportunity to get it written down in plain English, because we would acknowledge wills are very archaic in their language and they don't use punctuation and they are quite wordy. Whereas the letter of wishes is easier to understand, and that's where you can put the meat on the bones.

Fiona Debney: That's right. So your will is the structure. So the will is like the tailor's dummy. And then your letter of wish is whatever item of clothing you want to put on that tailor's dummy that day. So your letter of wish can be updated as and when your family circumstances change-

Catriona Attride: And it should be.

Fiona Debney: And it should be, so grandchildren grow up, they develop their own personalities, their own likes, dislikes, their careers, et cetera. And you change what you're doing in your letter of wish, according to what is happening around you without the expense of unnecessarily updating your will because the structure is flexible. It's just a detail that sits behind it that needs the attention then.

Catriona Attride: I hope that this discussion hasn't put people off doing altogether. I'm hoping that what it will do is give people food for thought and maybe just think, "Oh actually, do you know what, I haven't got a will, and I can see that I really do need to do one and actually will take a bit of time of my time to do that." But actually, I think the way we work it's more often than not clients will say, "Oh gosh, that wasn't as bad as I thought. It wasn't painful. And it wasn't as daunting talking about death." And that's because we're very experienced in talking to people about that, so do put them at ease and we do make sure that they don't feel overwhelmed at the prospect. And I am sure that I have seen somewhere that statistically, people who do a will live longer, but I don't know if that's a real one or a made-up one, but it's one that I will trot out all the time, cause I quite like the sound of it.

Fiona Debney: Absolutely. And I've got quite a long checklist for as many ways as possible of saying death, so don't keep using the word death-

Catriona Attride: Using the same word, yes.

Fiona Debney: I can use other expressions as well.

Catriona Attride: But I think more than anything else, this is not just for you. In fact, this isn't really for you in many ways. This is for those that you love and care about that you are leaving behind, and it's making sure that you are not making what is already a very, very difficult time if they've lost you even harder because of uncertainty and things happening that really shouldn't have happened. And that's the big thing, isn't it?

Fiona Debney: I agree. Yep, totally agree with that.

Catriona Attride: Okay. Well, Fiona, thank you very much for joining today on this discussion.

Fiona Debney: No, thank you.

Catriona Attride: And I'm looking forward to catching up with you again soon.

Fiona Debney: Lovely. Thanks a lot.

Catriona Attride: Thank you. Thank you for listening to Talking Family and Wealth. To find out more about the series, please visit gateleyplc.com/talkingfamilyandwealth. From here, you can subscribe for all updates, meet our speakers, and get more information on all of the topics being discussed.

Gateley Plc is authorised and regulated by the SRA (Solicitors' Regulation Authority). Please visit the SRA website for details of the professional conduct rules which Gateley Legal must comply with.

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