Dying without a Will or Life Insurance may be a serious problem
September 16th, 2011
One in three people die without leaving a will, usually in the mistaken belief that things will ‘sort themselves out’ if the unthinkable happened– especially if their lives appear to be fairly straightforward; maybe they have a spouse, kids and a house for example. However a recent case in the UK showed that this is definitely not necessarily the case, should you die intestate and without any significant life insurance.
Family left in Financial Difficulty when Husband died leaving no will or Life Insurance
Mandy Tenant a mom of three, found this out the hard way. Her husband Adam died suddenly without a will and had not taken out life insurance. With regard to strict intestate laws in Britain the estate was divided up between Mandy and her three young children, much being tied up in a trust fund for her kids. This meant that Mrs. Tenant was left financially insecure with no way to pay the mortgage, leaving the family in danger of losing their family home.
Mom told – if you want to keep your house then you will have to ‘Sue’ your children
On seeking legal advice she was told, by law firm Irwin Mitchell that the only way forward would be to sue her own children to gain control of the assets. A representative at Irwin Mitchell said “This whole situation could have been avoided with a valid will leaving his wife in control of the whole estate”. Plus, If Mr. Tenant had taken out proper life insurance cover this would have allowed his wife to pay off the mortgage, on his death. Without either a will or life cover Mrs. Tenant, came to realize that, in this unfortunate situation, intestacy does not recognize partners.
Intestacy Laws do not always make sense
Intestacy laws in the US vary from state to state – in Alberta for instance, which gives unmarried couples the same rights as married, a surviving spouse may learn that she or he is entitled to no part of the deceased husband/wife’s estate. In fact it could happen that the entire estate has been given over to an ‘ex’ partner in preference to the existing spouse or even the deceased person’s children and parents.
Protect your Loved Ones by Taking out Life Insurance
As well as taking out a will – a necessary if unpalatable chore – the importance of making sure you have enough life cover is essential. By taking out enough life insurance to cover the cost of your mortgage you can at least rest assured that, whatever else happens, your family will not end up losing not only you but their family home.
photo credit: smemon87
Source Telegraph.co.uk ‘No will? You’ll have to sue your children’ 13 August 2010