Myth #27: If I die without a Will, my family members and friends will still benefit and will be able to decide how to distribute my estate.
There’s no doubt about it — life is busy, and the last thing most of us want to think about is what should happen to our “stuff” after we die. Nobody likes to think about or ponder death — especially their own and there is often a common misconception is that a person doesn’t own enough to make a Will worthwhile. But in truth, the importance of having a valid Will cannot be expressed enough as a lack of forward planning may cause stress for loved ones in the future. A Will is one of the most important documents a person will ever sign, and represents financial peace of mind to those you leave behind.
Without a Will, the rules of intestacy will dictate who inherits your estate. This means that your assets will be distributed in accordance with the fixed rules set out in the Succession Act 1974. Essentially, the rules are structured so that relatives of the deceased benefit from the estate in fixed proportions. These rules are based on a number of assumptions about what a typical person who has died intestate would have put in his Will, if he or she had made one:
• All of the deceased’s property will be given to blood relatives.
• Spouse’s matrimonial claims are given priority over estate assets.
• With a larger estate, in addition to the surviving spouse, the surviving children will take a portion of the estate assets and if there are no surviving children then other relatives may inherit a share.
• If there is no surviving spouse, the estate will be distributed to other relatives with closer blood relatives taking priority over more distant relatives.
• Where there are no relatives at all, the estate shall belong to the Government as “bona vacantia” — being ownerless property which passes to the Crown.
It is important to realise that having the distribution of your estate dictated by the Succession Act 1974 may cause problems or worse, be contrary to your wishes. For example, the rules of intestacy only include spouses and blood relatives. There is no provision for any of your close friends such as the best man at your wedding or your roommate at college. More alarmingly, in Bermuda there is no legal recognition of “common law marriages” or “civil partnerships” so if you are in a long-term relationship and have decided not to get married, your long term significant other won’t benefit from your estate. This could be severely problematic in relation to the family home depending on how the property is held. For example, if the deceased person’s interest in the property falls into their estate, it will be distributed according to the rules of intestacy and the surviving partner could face a difficult legal battle and may be left without a home.
Issues can also arise when second marriages are involved. If your new spouse had assets of their own prior to the marriage and does not need any assets from your estate, you may choose to leave all of your assets to your children from your first marriage. If there is no Will setting out these wishes, your spouse may inherit the majority, if not all of your estate, pursuant to the rules of intestacy. What if he or she refuses to include your children? Furthermore, marriage revokes a Will unless that marriage had been anticipated in your Will. So even if you leave your assets to your children in your Will, any subsequent marriage leaves your estate in a position of intestacy unless you update your Will post marriage.
These are just a couple of the problems that can be faced on intestacy. Wills are essential documents for all adults and having a Will is the right thing to do no matter your age, your wealth or your family status. We advise against allowing your estate planning to fall to the bottom of your priority list. Think of preparing your Will in the same context as going to the doctor for your annual check-up, only in this instance, it’s a check-up on your estate rather than your health. A good legal practitioner can help you ensure that you put in place a valid Will that clearly sets out your wishes.
Stephanie Matthews is an Associate of the Chartered Institute of Legal Executives in the Property and Estate Planning Team at Marshall Diel & Myers Ltd. This column is for general guidance only and does not constitute legal advice.