Category: Probate, Wills and Trusts

Many people delay making a Will as they assume their estate will automatically pass to their loved ones. However, dying without a Will (known as dying intestate) can cause delay and create uncertainty for the people you leave behind.

This article will explain what happens when you die without a Will in England and Wales, and the importance of creating a Will. The process outlined below could differ outside of England and Wales.

What Does “Dying Intestate” Mean?

When someone dies without a legally valid Will, their estate must be distributed according to Intestacy Rules. These rules determine; who inherits your assets, in what order relatives are entitled to inherit and who can administer your estate. These rules apply regardless of your family circumstances and personal wishes.

Who Inherits Under the Intestacy Rules?

The distribution of your estate depends on your surviving relatives. The rules prioritise certain family members in a strict order, which is as follows:

>> Download Our Useful UK Intestacy Rules Guide of Who Inherits

Unmarried Partners

A common misconception is that a long-term partner will automatically inherit. This is not the case. If you are not legally married or in a civil partnership:

• Your partner has no automatic right to inherit under intestacy rules.
• It may be possible for them to make a legal claim under the Inheritance (Provision for Family and Dependants) Act 1975 if they fall into one of the categories of individuals who can make a claim. However, this process can be very costly and stressful, at a time which is already quite difficult.

No Living Relatives

If no living relatives can be found, your estate passes to the Crown. This is known as bona vacantia.

Who Will Deal With Your Estate?

If you die intestate, there is no appointed Executor. Instead, a potential beneficiary entitled to a share of your estate could apply to the Probate Registry to be appointed as the Administrator of your estate.

Potential Problems of Dying Without a Will

If a person passes away intestate, this could cause complications, for example:

• Loved Ones May Not Be Provided For

If the deceased has an unmarried partner or stepchildren, they will not automatically benefit from the estate under the Intestacy Rules. The deceased may have close friends that they deemed to be family and they would also not benefit from the estate. This could lead to financial hardship for those individuals and may mean that the deceased’s final wishes aren’t adhered to.

• Delays, Costs and Disputes

The administration of your estate is likely to take longer than if there was a valid Will in place. There may also be disputes between potential beneficiaries which may lead to increased legal costs. This can strain relationships between family members at what is an already difficult time.

• Loss of Control

The deceased has no control over who inherits their estate and they are unable to make specific gifts of cash or personal items.

Why Making a Will Matters

Creating a Will ensures that your assets are distributed according to your wishes. You are able to protect loved ones and also have control in who administers your estate. This minimises the likelihood of disputes and uncertainty arising. Having a valid Will in place gives peace of mind for both you and your family.

How We Can Help

At Lawson West Solicitors, we understand the importance of creating a Will to plan for the future. Our experienced team can help you through this process and ensure that your wishes are carried out. Whether your circumstances are straightforward or more complex, we can provide tailored advice to protect what matters most to you.

Get in Touch

For clear, confident guidance on making a Will or navigating intestacy, speak with our specialist team on 0116 212 1000 for expert support, alternatively complete the free Contact Us form and we will get in touch as soon as possible.

Created by AI and amended and checked by a qualified Solicitor

Pensions have long been regarded as one of the most effective tools for Inheritance Tax (IHT) planning.

For many individuals, pension funds represent not only a source of retirement income but also an important means of passing wealth to future generations.

Pension Benefits Are Not Guaranteed

However, recent technical guidance has highlighted an important point: the favourable IHT treatment of pension benefits is not guaranteed.

Importance of Structure

Whether pension funds remain outside your estate for IHT purposes will often depend on how your arrangements are structured and, crucially, who exercises control over the benefits.

Because IHT planning comes under increasing scrutiny, understanding how pensions fit into your wider estate plan has never been more important.

Why Are Pensions Important for Inheritance Tax Planning?

IHT is currently charged at 40% on the value of an estate above the available Nil Rate Bands and Residential Nil Rate Bands, if applicable.

Therefore, as property values and personal wealth continue to increase, more families are finding themselves exposed to an IHT liability.

Advantages of Pensions

Against that backdrop, pensions have traditionally offered a significant advantage. In many circumstances:

• Pension funds do not form part of your estate on death.
• Pension benefits can be passed to beneficiaries tax-efficiently.
• Trustees or scheme administrators can decide how benefits are distributed.
• More of your wealth can be preserved for your family.

As a result of this, many individuals have deliberately drawn upon other assets during their lifetime while leaving pension funds untouched, allowing them to pass to future generations.

The Key Issue: Who Controls the Pension Benefits?

The latest guidance focuses heavily on one central question: Who ultimately controls what happens to your pension when you die?

and the answer to that question can significantly affect the IHT treatment.

Where Trustees Retain Genuine Discretion

Where pension Trustees or scheme administrators have genuine discretion when deciding who should receive benefits, the pension is generally more likely to remain outside your estate for IHT purposes.

This means that pension funds may be passed to beneficiaries without increasing the value of the estate subject to IHT.

Where Control Remains with the Member

Problems can arise where arrangements suggest that the pension holder has effectively dictated what must happen to the funds after death.

So, in those circumstances, HMRC may argue that sufficient control has been retained to justify bringing the pension benefits into the estate for IHT purposes.

The result could be a substantial and unexpected tax liability for beneficiaries.

Why Your Expression of Wishes Is So Important

Many pension holders complete a document known as an Expression of Wishes or Nomination Form. This document allows you to indicate who you would like to benefit from your pension on death.

However, it is important to understand that an Expression of Wishes is intended to be exactly that—an indication of your wishes rather than a legally binding instruction.

Beneficial Aspects of Expression of Wishes

Therefore, a properly drafted Expression of Wishes can:

• Guide trustees towards your preferred outcome
• Preserve Trustee discretion
• Support the argument that the pension remains outside your estate
• Help ensure benefits are distributed in accordance with your intentions

By contrast, arrangements that appear to leave trustees with no meaningful choice may increase IHT risks. This is why regular reviews of pension nominations and beneficiary arrangements are so important.

A Growing Focus on Substance Over Form

One of the most significant messages arising from the guidance is that HMRC is increasingly concerned with how arrangements operate in practice, rather than simply how they appear on paper.

and practice means that simply stating that trustees have discretion may not be enough.

HMRC Scrutiny

Questions that HMRC may raise include:

• Do Trustees genuinely consider all relevant circumstances?
• Is there evidence that decisions are independently made?
• Could Trustees depart from the member’s wishes if appropriate?
• Has discretion been exercised properly in previous cases?

Of course, the more genuine the decision-making process appears, the stronger the argument that pension benefits should remain outside the estate. We now look at the impact for families…

What Does This Mean for Families?

For many families, pensions now represent one of the largest components of their overall wealth. The guidance should not be viewed as a reason for concern. Rather, it provides an opportunity to ensure that existing arrangements continue to work effectively.

Proper planning can help:

• Preserve family wealth.
• Reduce exposure to IHT.
• Prevent disputes between beneficiaries.
• Ensure pension benefits pass to the right people.
• Protect future generations.

However, failing to review pension arrangements could create unintended consequences and reduce the amount ultimately received by your family members.

Practical Steps You Should Consider

1. Review Your Pension Nominations

Many people complete nomination forms when they initially enter into their pension however, they will often never look at them again.

Your wishes may have changed significantly since the form was first completed, for example, you may now be married or have children.

Regular reviews can help ensure your pension benefits are distributed as intended.

2. Consider Your Wider Estate Plan

Pension planning should not be considered in isolation as this should work alongside your Will, any Trust arrangements that you have created and any lifetime gifting strategies you have in place.

A coordinated approach is often the most effective way to minimise IHT exposure.

3. Seek Professional Advice

IHT planning involving pensions can be highly technical and therefore specialist advice should be sought. This can help ensure that:

• Your arrangements remain tax-efficient.
• Beneficiary nominations are correctly structured.
• Potential risks are identified early.
• Your estate plan reflects both your wishes and current guidance.

How Lawson West Can Help

At Lawson West Solicitors, our Private Client team together with your other advisers, can help you review your current arrangements, assess potential IHT implications and ensure your estate plan continues to protect your family.

If you would like to discuss your IHT Planning and how we may be able to help, please contact our friendly Wills, Trusts and Estate Planning team on 0116 212 1000 or 01858 445 480 or complete our Contact Us form. We’re ready to work with your other advisers to make the process as efficient, comprehensive and straightforward as possible.

Written by a qualified Solicitor and enhanced by AI

What is a Trust?

Trusts are legal arrangements where a person (known as the “settlor”) transfers assets for example, cash or property, to a person/people of their choosing (known as “the trustees”. The job of the trustees is to then hold and manage the assets for the benefit of the beneficiaries. Trusts are often used for estate planning, to legally safeguard assets or for tax purposes and can be set up in a person’s lifetime or by their Will.

Types of Trusts

There are many different types of trusts which can be set up depending on what an individual is wanting to achieve. It may be appropriate to set up a lifetime trust to possible reduce Inheritance Tax (IHT) or manage income/capital gains tax liabilities. Alternatively, a trust can be set up within a Will to safeguard assets from any possible future remarriage or to protect vulnerable individuals who may be dealing with addiction issues or going through a divorce. It is important to note that if a trust is set up in a Will, the trust will only come into effect on the death of the settlor.

How do Trusts work?

1. The trust will need to be created by the settlor and the most common and sensible way of doing this is in writing, to establish the assets and terms of the trust.
2. The control of those assets will then be with the trustees and they will need to manage those assets in accordance with the trust.
3. The beneficiaries may benefit from the assets (how they benefit will depend on the type of the trust and the terms stipulated within the trust).
4. The trust may eventually come to an end, depending on the terms on which the trustees are acting (trusts are usually only set up for a set period of time). At that stage, the trustees will need to consider how to legally bring the trust to an end, whilst complying with any of HMRC’s requirements.

Tax Considerations

• Inheritance Tax – some trusts are subject to the relevant property regime which could mean entry, exit and anniversary charges may apply.
• Income Tax – the trustees may need to pay tax on income the trust earns.
• Capital Gains Tax (CGT) – the trust may owe CGT when assets are sold or transferred.

Obtaining legal and financial advice is essential when considering trusts, as there are many legal complexities which need to be considered, not only in respect of the initial setting up the trust, but also during the actual running of the trust itself.

How can we help?

Speak to one of our specialist Trust and Estate solicitors today.

If you would like to discuss setting up a trust, please call us on telephone 0116 212 1000 or 01858 445 480, alternatively fill in the free Contact Us form and we will get in touch as soon as possible.