Separating from your spouse creates a whirlwind of emotions. There are 101 things to think about and understandably, the kids, the house and the money usually take priority. But there are two very significant things to consider which often fall by the wayside, and if forgotten about, could have serious consequences. The first, is updating your will.
It is likely that at the start of the marriage, if not before, spouses will have nominated each other as their main beneficiary and also their executor, in their will. Clients are often horrified to hear that unless they change their will to remove their now separated spouse as a nominated beneficiary, the spouse will still inherit. No matter how much the relationship has fallen apart, the law of inheritance does not change for separated couples – only divorced couples. Moreover, a surviving (albeit separated) spouse will be entitled to claim legal rights (a proportion of the deceased’s moveable estate) as an alternative to receiving the benefits provided for them in the will. Depending on the circumstances, this could result in the separated surviving spouse receiving more than they were intended to receive. It is also possible for the deceased’s child to claim their legal rights. So a fresh will that reflects your new circumstances needs to be a priority.
If a client does not have a will in place, I strongly recommend that one is put in place, without delay. If a separated individual were to die without a will (known as dying ‘intestate’) the surviving spouse would be entitled to prior rights. This means, in Scotland, they would inherit the deceased’s interest in the house (but only if they are ordinarily resident there) up to a value of £473,000, furniture and household contents up to the value of £29,000 and up to £50,000 in cash (increased to £89,000 if there are no children between the spouses).
However, it doesn’t end there – legal rights also apply on intestacy, so your spouse could receive even more if there are any moveable assets left over! This is an alarming amount for a separated spouse to receive, following separation. Putting a will in place allows you to take greater control and ensure that your estate is distributed as per your wishes (once legal rights have been settled).
As well as amending your will, you should re-visit the nominated beneficiaries for your pensions. Again, it is likely that when starting out in employment, you named your wife or your husband as the one to receive your pension should anything happen to you.
Following a separation, it is likely that you will want someone else to receive your pension benefit, such as your children or siblings. All that requires to be done is to contact your pension provider and ask to change your nominated beneficiary. They may ask you to complete an ‘Expression of Wish’ form, which will allow you to provide details of your new beneficiary(ies) and what percentage(s) they should receive.