Many people assume that everything will automatically pass to the surviving spouse, however this is not necessarily the case.
The surviving spouse does not always automatically inherit everything that the deceased spouse left behind if the estate is substantial. Under the intestacy rules, the surviving spouse inherits an initial lump sum tax free, together with all the deceaseds personal belongings. This statutory legacy is currently 250,000 where the deceased had children or grand children.
The survivor will also receive a statutory life interest in half of what remains of the estate. This means the right to the income on that capital sum, but not to the capital itself. However, the surviving spouse (or registered civil partner) has the right to capitalise this life interest. This means that he or she can require the personal representatives of the estate to pay them a lump sum instead. If this is the survivors preferred option, the right must be exercised within twelve months of the date the grant of representation was issued. There are specific rules set out in statute as to how the value of this sum is to be calculated.
So what happens to the remaining part of the estate? This will go equally to any surviving children or grand children who will, in turn, inherit the life interest fund when the surviving spouse or registered civil partner dies.
Where there are no children or grand children involved, the surviving spouse will receive a statutory legacy of 450,000 where there are surviving parents or siblings. The rules also govern where the estate will go if certain categories of family members, such as parents or siblings, are not alive.
So what should you do if your spouse or registered civil partner dies leaving an estate worth more than 250,000 but has no Will? It is crucially important that you contact a legal expert with details of the closest family members and details of all property and assets so that the intestacy rules can be applied properly and quickly.
The legal expert will then be able to advise you properly and promptly on who is entitled to what out of the estate.