Death, Taxes and the Crown: What happens to everything I own when I die?
The belief that the Queen will take all of your assets if you die without a Will is often raised by those who are not sure how the law works. Whilst there is a rare possibility that this could happen, there is a system in place that must be followed in the first instance.
If you make a Will, you are able to name the person(s) who will deal with its administration and those who will inherit your estate. The benefit of leaving a Will is that there is no dispute as to how your assets are left and it can be used to make use of specific tax exemptions and reliefs.
Intestacy Rules
If you do not make a Will, your estate will be distributed in accordance with the “Intestacy Rules”. These rules are determined by the Government and dictate how your assets will be inherited by a hierarchy of people who can potentially both apply to deal with your Estate and inherit as a beneficiary.
The order of this hierarchy is as follows:
- Spouse/Civil Partner
- Children
- Parents
- Siblings
- Half Siblings
- Grandparents
- Aunts and Uncles
- Half Aunts or Uncles
- The Crown via Bona Vacantia (Latin for “Vacant Goods”)
Should one of the named people above survive the deceased but die before inheriting, the inheritance will be dealt with under the intestacy rules again or by any Will left by that surviving beneficiary.
Problems with the Intestacy Rules
Whilst the Intestacy Rules provide a list of potential family members who are able to inherit before the Crown, there are a number of issues that can arise when the rules apply.
It is commonly thought that if someone dies without a Will their Spouse/Civil Partner will receive everything. However, if you have children, up to £275,000 will pass solely to your Spouse/Civil Partner with any personal possessions. Anything over £275,000 will then be divided evenly between the surviving Spouse/Civil Partner and any surviving children. Therefore for inheritance tax purposes and personal preferences, it may be that you do not wish for your children to inherit at this time, particularly if they are still minors.
Additionally the Intestacy rules only allow for those named to in the hierarchy to inherit. Therefore for couples who are not married and co-habiting with children, this can cause a problem as the surviving parent will not inherit anything and all assets will pass to their children. If there are no children this will go to other family members.
Moreover, whilst the Intestacy rules allow for a long list of family members to inherit before the Crown, the list does not take into account relationship breakdowns or family feuds. Therefore if a Will is not made to state otherwise, family members may inherit where the deceased may not have wanted them to.
How likely is it that the Crown Will inherit my assets?
The head of the Bona Vacantia Division (BVD) who deals with Estates passing to the Crown has stated that 80% of those referred to them are not applicable as the BVD will not deal with any Estates that have left a Will or where family is known to have survived the deceased but not taken an interest in inheriting.
Therefore inheritance by the Crown will always be a last resort and will only ever likely be applicable to the very elderly who have died with no surviving family of any kind. In the past year it is reported that Prince Charles has received £1 million from unclaimed Estates in Cornwall which he has used to fund his charities.
A will can help to provide safety and security for your loved ones and ensure that your wishes are met when you pass away. Our experienced Wills & Probate solicitors in London can help you to draft a will that fully meets your needs. To discuss your will with us, get in touch today on 0808 271 9413 or contact us online.