The Cost of Dying Intestate
People who don’t make a Will usually come up with a variety of excuses such as because they haven’t got around to it, haven’t fully appreciated the importance of planning ahead for the future, unwisely assume that they don’t have enough money or assets to need to make one or believe that their next of kin will get everything anyway.
It is important to remember that there is a hidden cost to dying Intestate without a Will, one which they may not have wanted to burden their loved ones with at this difficult time.
When someone dies without a Will, the next of kin will have to hire a probate specialist or deal with it themselves, which can be very time consuming. They will need to gather all the details about the deceased persons’ estate, what they owe, what they are owed, what they own and to try and then the rules of intestacy will dictate who is entitled to what. This frequently is not the people whom the deceased would think would receive it thanks to the more complicated family structures we have today and this can cause disputes, delays and much heartache.
The starting point will be to speak to the deceased’s bank or building society if they didn’t share a joint account with their next of kin, to find out which regular payments are made for example to cover utility bills and to arrange for these to be continued to be paid by alternative means or stopped.
If you own a property and have a mortgage, the mortgage company will not talk to just anyone, so your next of Kin will need to apply for a Grant of Administration to allow them to be appointed an administrator on the deceased’s behalf. In the meantime, the mortgage will need to be paid to ensure there are no penalties, late payments or in the worst case scenario, action by the lender to foreclose on the loan and repossess the property.
If you die with other debts such as loans or credit card debt, this will also have to be paid. If you have a car with a loan or lease arrangement the vehicle may have to be handed back if the payments cannot be met and there could be early penalties for repayment.
If Inheritance Tax is due to be paid on the estate, this could mean a substantial bill for next of kin whereas simple IHT planning by making a Will could have helped to avoid this situation.
Then there will be the nitty gritty of guardianship arrangements for children under the age of 16, pensions, life cover, possessions, pets, passwords… the list goes on and all of these things have to be dealt with. Again squabbles can often occur over the silliest of things because someone believes they should have something, rather than it be set out clearly in a Will.
Finally, there will be funeral arrangements and costs. Many people like to leave or specify a sum to pay for the costs of their funeral and to also set out their wishes as to what they would like to happen, should they be buried or cremated, a religious or a non religious service.
These are just a few of the considerations that should be taken into account and I would urge everyone aged 18 or over to make a Will and to keep it updated to reflect the changes in their life, rather than to allow the generic rule of intestacy to divide up their life and eat into the cost of their estate.