How Can Married Couples Avoid The ‘Intestacy Trap’?

For many couples who marry or enter into civil partnerships, the union is more than just symbolic. Relationships encompass every aspect of marital life, from ownership of the matrimonial home to the division of financial responsibility for mortgages and bills. Even determining who should take the dog for a walk on a wet night can involve a negotiation! Couples inevitably make financial decisions in marriages jointly, and by ‘tying the knot’ they may believe that they have future-proofed their affairs.

But couples of all ages should be wary of the intestacy trap: it is not always guaranteed on the death of one spouse that everything will automatically pass to the other.

Unless a Will is stated to be ‘in contemplation’ of marriage or civil partnership and the relevant formalities are adhered to, the marriage of a couple will usually automatically revoke any Wills they have made beforehand. This has been largely the case since the early 19th century, so it is perhaps surprising that marriage ‘myths’ such as this are still circulating today.

Without adequate planning, newly-wed couples can find themselves financially unprotected for the future – and may not even realise it.

If a person dies without a valid Will in England and Wales, any assets they own in their sole name will pass via the ‘Intestacy Rules’ which are set out in statute and dictate a strict order in which members of the family can inherit. Family members who do not fall within a certain list of people will not normally inherit anything, and friends and charities can never inherit under the rules.

Where one spouse dies without any children, the intestacy rules are usually straightforward as everything will pass to the surviving spouse.

However, the issue arises where children are also involved, as in this scenario the surviving spouse will only be entitled to personal possessions and a £322,000* cash gift at most, and will need to split half of anything over this amount with any children (even if they are very young). This can cause significant difficulties for a surviving spouse, who not only inherits less than expected but is then required to look after any inheritance until their children enter adulthood while also dealing with the loss of a loved one.

There are two solutions to ensure that everything passes on death as intended:

  1. Where unmarried couples are making Wills shortly before their wedding date, they could consider making them ‘in contemplation’ of marriage to prevent the Wills from being revoked. Specialist legal advice must be sought to ensure that the Wills are not unintentionally revoked by marriage.
  2. A couple should consider making Wills as soon as possible after marriage, to ensure that all assets will pass to the correct people, the tax benefits of marriage are fully utilised, and that there is someone trustworthy nominated to sort everything out on death.

Geldards’ Private Client team is experienced in ensuring that wealth cascades down to future generations in a tax-efficient and simple manner. If you wish to make a Will or have concerns about your current situation, please contact the Private Client team.

*for deaths on or after 26 July 2023. Different rules apply before this date.

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