With a large number of stepfamilies in the UK, inheritance issues can be complex when either parent dies – making it more important than ever to have a Will. Ian Newcombe, head of our private client team in Exeter explains.
It is always important to make a Will to ensure your assets are passed on in the way that you wish when you die – especially if you marry for a second or subsequent time and there are stepchildren involved.
Figures released recently by the Office of National Statistics (ONS) showed that there are over half a million stepfamilies in the UK. One in ten children lives in a stepfamily.
At the same time, an estimated 60 per cent of the population does not have a Will. Even amongst older age groups, as many as 30 or even 40 per cent of people do not have one.
Clearly then, there are many instances of people dying with stepchildren involved and no Will in place.
In such cases, the likelihood is that most of an individual’s assets will pass to their spouse. And when they die, their tendency may well be to leave all or most of the estate to their own children – potentially leaving the original spouse’s natural children out in the cold.
Indeed, new rules that came into effect at the beginning of October strengthened the position of the spouse rather than the children where there is no Will in place. Before, the first £250,000 would pass to the spouse with half of the remainder going to the deceased’s children at the age of 18, and the other half going into a trust that would pay interest to the spouse until they died, when the capital would pass to the children of the first spouse to have died.
Now, however, the portion that used to go into a trust will simply pass to the spouse.
So if someone dies with no Will and a £300,000 estate, £275,000 will go to the spouse and only £25,000 to the natural children – which may be far less than the parent would have wanted.
Then consider that if a person dies without a Will and assets of less than £250,000, all of it will pass to the spouse and nothing at all to the children.
Where a couple are co-habiting rather than married or in a civil partnership, the children’s situation is potentially better because each individual’s assets would, in the absence of a Will, pass to their respective children when they die. But the situation can become complex and uncertain here too, because a co-habitee can make a claim against the estate if “reasonable provision” has not been made for them.
The best and most sensible action is always to make a Will. This will provide clarity and certainty.
Where couples sit down and make a Will while life is ticking along normally, in my experience it is not difficult to make satisfactory arrangements for all. The later things are left, the more issues tend to arise.
Ian Newcombe is a partner and head of the private client team in Exeter, which was named Private Client and Family Law Team of the year at the British Legal Awards 2013. To contact Ian, please call 01392 210700, email solicitors@stephens-scown.co.uk.