Top 5 Things You Wish You’d Known About Inheritance

Shakespeare’s Hamlet may have described death as ‘the undiscovered country’, but the rules surrounding inheritance can be equally confusing for those considering how to manage their estate and distribute it fairly after they pass away.

In this article, we will explore some common inheritance facts that you need to know when planning what happens to your assets after your death. Of course, should you have any unanswered questions or require expert professional assistance when writing your will or managing your estate, it is advisable to consult an inheritance dispute solicitor who can offer you impartial and trustworthy advice.

Inheritance Tax

Inheritance tax is a tax charged on the estate (i.e., property, possessions, and money) left behind by a deceased person. Currently, the rate is 40 per cent, which is charged on the part of the estate that is above the tax-free threshold of £325,000. For example:

• If the value of the estate is £300,000, then no inheritance tax is due.
• If the value of the estate is £400,000, then tax is due on the amount over the threshold, in this case, £75,000.

A common question is whether you can avoid Inheritance Tax.

The tax is not payable if the estate is left in its entirety to a spouse’s civil partner, a community amateur sports club, or a charity. Also, if your home is left to your children or grandchildren, the tax-free threshold is increased to £500,000.

Individuals may also reduce their tax bill by making gifts (within defined parameters) or setting up trusts.

Intestacy Rules

When someone dies without a will, they are classed as ‘intestate.’ In this situation, their estate is subject to English intestacy rules which stipulate how their assets are to be distributed. There are various scenarios set out under intestacy rules, including:

• The spouse of the civil partner of the deceased receives the first £270,000 of the estate.
• The rest of the estate is divided into equal shares between the partner and children, with the former receiving 50 per cent.
• Children will receive the whole estate in equal shares if there are two or more, and if there is no surviving partner. Only children and no surviving partner will receive the whole estate.
• A partner who is not a spouse or civil partner of the deceased will receive nothing.

Heir Hunters

Most people have heard stories of long-lost relatives suddenly inheriting vast wealth from distant uncles, aunts, or cousins – and such situations are not a work of fiction. If someone dies without any known heirs, heir hunters may track down distant relatives who may be entitled to receive a portion of the estate left behind. In exchange for their services, heir hunters will also be paid a portion from the estate.

Digital Assets

Although often overlooked, a person’s digital assets – for example, their social media accounts, cryptocurrencies, or online bank accounts – may also be subject to inheritance rules. However, because these are complex and require specific instructions in a Will, it is essential to gain professional legal advice from a specialist probate solicitor to determine what happens to them after your death.

Disinheriting

Sometimes, family relationships collapse, but disinheriting a close relative – excluding them from your Will – is not straightforward, as certain rules apply. Spouses, civil partners, and children have a legal right to claim against an estate if they have not received appropriate financial provisions. A Wills and Probate specialist will be able to advise you further on disinheriting should you want to know more.

Contact Astle Paterson For Expert Professional Advice

If you need expert advice from an experienced Wills and Probate Solicitor, please call Astle Paterson on 01283 531366 or send us a message and we will be delighted to assist you.

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