As I mentioned in my previous article, if you die without a Will, you die intestate. The rules of the land where your assets are held then decide the fate of asset distribution. This may not be what you intended.
The United Kingdom is split into 3 territories; England and Wales, Scotland and Northern Ireland. Most of us would leave everything to our spouse then to our children if our spouse was not here.
England and Wales and Northern Ireland allow you to name anyone you like in your Will but if you pass away without one and have children, the spouse can inherit GBP250,000 then the balance of the whole estate is split with the spouse and children.
Scotland, however has forced heirship rules whereby your children have to be included in the distribution. They must have a share of your assets. You cannot exclude your spouse, children or civil partner. These rules are mainly concerned with immovable assets such as land or property.
If you die without a Will in Scotland, your spouse is entitled to GBP473,000 then the balance has a third to spouse and the balance to children.
Stepchildren do not count as children unless legally adopted.
Although your eventual intentions maybe for your children to inherit, it may not be practical when they are still at school and costing a fortune to raise.
You may also be forcing a tax liability as UK has Inheritance Tax. This is not payable if a UK spouse passes their estate onto a UK spouse BUT would be if the estate passed onto children and was worth more than GBP325,000 … 40% tax bill on any amount above.
The United Kingdom has had many cases whereby parents have had to sue their own children for inheritance as they were not married to the deceased, and the assets were given to legal issue (children) as part of the intestacy rules. Unlike Australia, there is no de facto spouse position in UK whereby a live-in partner is entitled to the estate of the deceased, no matter how long they have been together, even if they are a parent of the children.
Europe is more complicated as most countries have forced heirship rules like Scotland whereby children must be included in distribution, no matter a Will or not. Each country has its own interpretation. None of them give full distribution to spouses if there are children! Most countries will give equal shares to the spouse and children, thus leaving the spouse with a lesser amount if there are 2 or more children.
Imagine your home having to go to your children as a share because a Will was not drawn up. This would be the case if the title was in your spouses’ name alone. This happens many a time also as the main breadwinner of the family may have been forced to only have their name on title by the mortgage lender.
Although the rules state that you should have one Will only, globalisation has taken over and we tend to have assets all over the world so you also have to consider that each place you hold assets should have a separate Will. This would speed up the time of distribution as each document has to go through Probate. If you had one Will and it was allowed to be re-sealed after each reading per country, it would take years to distribute your estate. Also, not all countries would accept a re-sealed Will from another jurisdiction.
You also need separate Wills as you may hold assets in different legal systems. If you had property in UK, Spain and Hong Kong, UK and HK are Common Law but Spain is Civil Law. UK and HK do not have the same distribution rules if you die intestate. UK allows the spouse to inherit all if there are no children but in HK, this has to be split with the parents of the deceased. Spain has to include your children or they will force the distribution.
The good news is that you don’t have to go to each country to write a Will. You can be in one place to write them all but the documents have to distinguish between the jurisdictions. This is generally done through the revocation statement so that the court of probate would understand your instructions.
Having assets all over the world can be more complex than we think, especially if we die without giving confirmed instructions for distribution when we die. Our poor loved ones left behind would have to trawl through all of the paperwork needed to get hold of our assets. This can take a long time and cause prolonged financial and emotional stress.
Next week - Part 3 : USA and Canada
Please feel free to contact me with regards to updating your existing Will or to get your document written.
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