Do you ever wonder what happens to your assets when you die? Many people believe that everything simply passes to their spouse and then “they can sort it out”. However, this isn’t necessarily the case.
If you die without making a Will, you are considered to have died intestate. This means that your estate passes in accordance with a strict legal order that stipulates who gets what and when. The Intestacy Rules can often cause complications as many people’s circumstances are more complex than they think.
If you died intestate then any assets which you own jointly with your spouse would automatically pass to them, such as a joint bank account. If you have children, your spouse would then receive the first £250,000 of your sole assets, plus half of the remainder of your assets. The remaining 50% would pass to your children outright. This may seem like it is reasonable but there are various possible problems with the Intestacy rules.
One problem is that any assets that pass to your spouse could then ultimately pass to other beneficiaries on their subsequent death. This is particularly an issue when it comes to having children from previous marriages, or if your spouse was to remarry after your death. Once your assets have passed to your spouse, the assets belong to them to do whatever they wish. This means that on their death, the assets will either pass under their Will, which could potentially cut out your children or under the Intestacy Rules (if they don’t have a Will), which would also disinherit your children and family.
Another possible problem which may arise is that the Intestacy Provisions may make insufficient provision for your spouse, especially if you own the matrimonial home in your sole name. It may mean that the surviving spouse does not even inherit the property in full.
Peter Stringfellow’s recent death could have caused a lot of bickering for his family
Everyone's circumstances are different and just because someone has money does not mean that there will not be problems. Take Sheffield native Peter Stringfellow’s recent death as an example. He has been married 3 times and has 4 children, who range in ages from his eldest daughter who is in her 50’s to his youngest son who is not yet 3. He is estimated to be worth over £35 million.
If Peter Stringfellow left his entire estate to his current wife, then his two children from his previous marriages may never receive any of this money, depending on what his wife chooses to do with the inheritance. The inheritance would belong to his latest wife and would be hers to do what she wants with. Peter Stringfellow’s wife was only 35 at the time of his death – if she was to remarry in the future she could leave the entire estate to her new husband and thus disinherit all of Peter Stringfellow’s children.
These highlight some of the reasons why it is vitally important to ensure that you make a Will. You need to ensure that you carefully consider all the different options available to you, in order to ensure that your assets ultimately pass to who you wish them to pass to. There are many ways in which you can safeguard your assets to ensure that this happens.
How can I protect my assets?
Many people are concerned about safeguarding their assets for the future generations. They want to ensure that if their spouse survived them and did remarry, then their assets would ultimately pass to their own children.
One option to protect your assets is to create a trust in your Will. This can allow your spouse the use and benefit of your assets, but in the end, your assets will pass to your children, meaning that any children from previous marriages will not be disinherited.
However, it is important to remember that assets held jointly, will automatically pass to the joint owner, regardless of what your Will says. It may, therefore, be necessary to amend the ownership of joint assets.
For example, if you own a property jointly with your spouse, it is likely that you own the property as Joint Tenants. This means when you die the property will automatically pass to the survivor. This joint ownership can be severed so that you become Tenants in Common. This means, that you each separately own a half share of the property. You can then deal with what will happen to your own half share in your Will.
There are a number of different options to consider surrounding making a Will to include a trust and which is the best way to proceed for you personally.
Quick Reasons to Make a Will
Decide who gets your stuff when you die
The most common and simple reason to make a will is to decide who will get your property when you die. Without a will (or other plan, like a living trust), your state laws determine how your property will be distributed -- usually to your closest relatives, like your spouse, children or parents. Learn more about what happens if you die without a will.
Name an executor
After you die, someone needs to help wrap up your estate. You can use your will to name an executor (or personal representative, in some states) to take on this task. Without a will, a court will appoint someone to do this job. Learn more about naming an executor with the Executor FAQ and If There is No Will, Who’s the Executor?
Name a guardian to take care of your children
A will is the only place to nominate a guardian to care for your children. If you don’t need a will for any other reason, but you have minor children for whom you want to name guardians, you should make a will. If you die without a will, a court will decide who should care for your kids. Learn more about a Guardianship for Your Children.
Name a property manager to take care of you children’s property
Property left to children, either by you or anyone else, must be managed by an adult. When you leave property to your children (through a will, trust, or life insurance or other beneficiary designation) you can leave instructions about how that property should be managed – usually, either through a trust or through UTMA. Separately, you can use your will to name a property manager who will take care of any property that is left without a named guardian. Learn more about Leaving an Inheritance for Children.
Provide a caretaker for your pet
You can use your will to name a trusted caretaker for your pet. You can also leave money to that person to help him or her care for your pet. Using a will isn’t the only way to plan for your pet’s care, but it is usually the simplest option. Learn more about Estate Planning for Pets.
Provide a backup for your living trust or other estate plan
If you think you don’t need a will because you have a living trust and don’t need to name guardians for children or pets, think again – you might want to make a back-up will. A back up will provides a catch-all for any property that isn’t taken care of by your living trust or other estate planning device. For example, it will take care of any property that you forget to transfer into your living trust, that you acquire after you make your living trust, or that is transferred incorrectly to your living trust. Learn more about Living Trusts.
How Do I Make a Will?
You can make a will yourself, or you can have a lawyer make one for you. After the will is made, you sign and two witnesses sign it to make it legal. Learn details about How to Write a Will.
For more information, or if you wish to discuss which your options, please do not hesitate to contact us on 0114 272 1884 or visit our Sheffield office: 11 Paradise Square, Sheffield, S1 2DE.