Dying Without a Will
Have you ever considered what would happen to your property when you die? If you have made a will, there is every chance that the people you want to will get control of your estate, including your investment property.
If you have not made a will, then it is quite possible that the commercial or residential property portfolio that you have built up, maintained and arranged landlord insurance on, over many years, could end up in the hands of the “wrong” people; even the Crown, in some circumstances.
For example, unmarried couples (who are not in a civil partnership) have virtually no rights whatsoever. There is no such thing as a common law marriage, for legal purposes.
If a person dies intestate with a surviving spouse or civil partner and children the spouse/civil partner is entitled to Aï¿½250,000, the deceased’s personal possessions and a life interest in half of the residue of the estate. The children will be entitled to half of the residue immediately and the other half on the spouse’s death.
If a person dies intestate leaving a spouse or civil partner but no children the spouse/civil partner is entitled to Aï¿½450,000 plus the personal possessions. The spouse is also entitled to half of the residue immediately, with the other half going to relatives of the deceased ranging from parents, through siblings to more remote relations. If there are none, the money goes to the Crown.
However, if the person leaves a spouse only and no siblings, nephews or nieces then the spouse will be entitled to the whole estate.
It works differently for those not in a relationship. If a person dies unmarried with children, the children will be entitled to the whole of the estate equally (or their children if they have predeceased). Any unmarried partner would need to make a claim against the estate under the Inheritance (Provision for Family and Dependents Act 1975) to seek financial provision from the estate.
If a person dies unmarried with no children the whole of the estate will pass to the relatives of the deceased ranging from parents, through siblings to more remote relations. If there are none, the money goes to the Crown.
The way the intestacy rules operate highlights the need for unmarried couples or families with step children (who are only covered by automatic entitlements if adopted by the person who dies) to make a will. Otherwise they are still not provided for under the intestacy provisions.
The cost of making a will need not be high. The cost of not doing so could be suffering for those you care most about.
Of course, planning who gets your money at your death also allows you to consider how to minimise the potential impact of inheritance tax on your estate. After all, even if the Crown is not going to get your entire estate, you could well become a 40% taxpayer when you die, if your estate is more than Aï¿½325,000 (up to double for a married couple or civil partners). Advance planning can reduce the impact.
It is important to seek independent professional advice before making any decision about your property owners’ landlords insurance quote as well as your financial obligations. You should always ask your insurance advisers what experience they have of dealing with residential and/or commercial rental property insurance.