Separating or divorcing? Why making a Will should be a priority

For many people, making a Will is something that gets pushed down the list of priorities.

During a relationship breakdown, there are more often more immediate concerns: dividing assets, sorting living arrangements, agreeing financial settlements, sorting out living arrangements for any children and dealing with the emotional impact of separation.

However, one important consideration can easily be overlooked: what happens to your estate if you die before your divorce is finalised?

The George Michael guitar story

George Michael’s former personal assistant, Siobhan Bailey, worked with the singer for more than 20 years and was gifted a number of personal items during her employment, including the iconic guitar featured in the Faith music video.

When Siobhan died in 2014, she was in the process of divorcing her husband, Ian Belcher. However, the divorce had not been finalised and, importantly, she had not made a Will.

As a result, her Estate passed under the intestacy rules. These rules are set by legislation determining how the Estate passes dependent on whether there is a spouse, children and wider family members.

Because she remained legally married at the date of her death, her husband inherited her estate including the collection of George Michael memorabilia.

The consequences have recently attracted attention from major media outlets following the sale of the collection at auction. The guitar alone fetched £180,000 with the total collection fetched £238,000 excluding buyers’ premium.

The wider family have said that Siobhan intended to leave her estate to her nieces and nephews and had started to make a new Will but never finalised it before her death.

The circumstances provide a stark reminder that what someone intends to happen to their estate and what actually happens under the law can be two very different things.

Does separation mean the marriage has ended?

Unfortunately the common misconception is that separating or even commencing divorce proceedings automatically changes the inheritance position.

It does not.

Until the Decree Absolute is issued, i.e. the divorce is legally finalised, married couples or civil partners remain entitled to inherit under the intestacy provisions.

Depending on the value and composition of the Estate this can mean a surviving spouse or civil partner can inherit all or a substantial proportion of the deceased’s estate, potentially leaving children or other family members with less than anticipated.

Even where a couple have been separated for several years and have established separate households and have no intention of reconciling, their legal status remains unchanged until the divorce is finalised.

This can produce an outcome that neither party would have anticipated or wanted.

What happens to an existing Will?

Separation and divorce can also have important implications for anyone who already has a Will.

If you made a Will during your marriage or civil partnership, it is important to understand how divorce affects its provisions.

Once a divorce becomes final, any appointment of a former spouse or partner as executor or trustee and any provision to that former spouse takes effect as though they had died on the date the marriage or civil partnership was dissolved.

This does not happen until the divorce is finalised. 

The existing Will will be operate as before and any provisions benefitting the spouse will still remain legally effective.

Therefore this may mean the existing Will no longer reflects wishes.

Should you make a new Will during divorce proceedings?

Making or reviewing a Will should be one of the first things done when a relationship breaks down.

A new will can provide an opportunity to:

• Ensure the estranged spouse or partner does not inherit your estate simply by remaining legally married.
• Appoint alternative executors to deal with your estate when the time comes.
• Make provision for children, other family members or other beneficiaries of your choice.
• Consider who should benefit from particular assts including personal possessions.
• Review any existing trusts and consider how your estate should be managed for the benefit of your chosen beneficiaries.

It is important to caveat the above to understand that a Will cannot necessarily override all rights of the surviving spouse or civil partner under normal divorce proceedings. However having something in place, should the worst happen during the course of the financial settlements, will mean that those discussions can continue rather than everything being set aside and the law of intestacy or the terms of an existing Will applying.

What about the family home and jointly owned assets?

It is also important to remember that a Will only deals with assets that form part of an individual's Estate. 

If a property is owned as beneficial joint tenants, the deceased’s interest will generally pass automatically to the surviving joint owner under right of survivorship regardless of what the Will says.

As well as making a new Will on separation or commencing divorce proceedings, it may therefore also be an appropriate time to review how jointly owned property is held and looking to sever the joint ownership. If a property is held as tenants in common. Each registered proprietor has a defined share of the property which passes via the terms of a Will. The same concept also applies to joint bank accounts and investments.

Moral – Don’t wait make a Will

The circumstances surrounding Siobhan Bailey’s estate demonstrate that dying during divorce proceedings can have far reaching consequences.

It is entirely possible to spend months or even years negotiating financial arrangements only for the ultimate destination of your Estate to be determined by intestacy legislation or an old Will rather than your current wishes.

Making a Will does not need to be complicated but it does need to be properly considered and executed. 

There may also be a need to review the Will again once the divorce is finalised and any financial settlement has been agreed. 

At Thackray Williams we can provide you with a properly drafted Will which can help ensure that your wishes are respected and that your estate passes to the people you actually intend to benefit. Please contact Mitchell Thompson on 020 8776 3887 or mitchell.thompson@thackraywilliams.com, or speak to anyone in the Private Client team who will be happy to assist you.

 

This article provides general information only and should not be treated as legal or tax advice. Specific advice should always be obtained based on individual circumstances.