Writing a will may save your loved ones time and expense
BBC News explains the rules governing inheritance and what happens to your possessions if your die without making a will.
If you have been left money in a will then the amount you receive will depend upon the size of the estate and the terms of the bequest.
If the estate from which the money is to come is worth less than the £300,000 threshold (2007/2008 tax year) at which inheritance tax kicks in then no tax will be payable and you will receive the full amount.
If the estate is valued at more than £300,000 then inheritance tax comes into play at 40% on the remaining value.
The amount you get will also depend on exactly how your relative's tax affairs have been structured and how the will has been worded.
What is an estate?
Everything owned in his or her name
The share of anything owned jointly
Gifts from which he or she keeps back some benefit, for example, a house still lived in and maintained, although given to someone else
Assets held in trust from which he or she gets some personal benefit, for example, an income
Source: Revenue and Customs
Bear in mind that probate cannot be granted until the inheritance tax bill has been settled.
A recent deal between Revenue and Customs and banks means bereaved relatives will be spared taking out costly loans to pay tax.
Under the new agreement, banks will release money directly from the deceased estates before probate.
Only the spouse of the person who has died can inherit without incurring inheritance tax.
In addition, anything left to a UK registered charity, and any bills outstanding at death, including funeral expenses can be deducted from the tax liability.
Every other beneficiary will be subject directly or indirectly to paying that tax once the £300,000 threshold has been breached.
Some simple and some more sophisticated techniques can be used to reduce the tax payable yet further and it is this planning combined with the wording of the will which will determine how much you actually receive.
Intestacy is the word used to describe the estate of someone who dies without leaving a will. The rules in England and Wales are different than in Northern Ireland and Scotland.
If you die intestate (i.e. without having made a will) the government can end up with your assets if you have no close relatives. Even if you do, your wishes may not be followed.
The rules on which members of family get what only apply when no will has been made or where certain assets of the estate have not been covered by the will.
The intestacy rules dictate:
1) If you are married with children then when you die intestate your spouse gets everything up to £125,000 together with your personal possessions.
The remainder is split in half with 50% going to your children when they reach the age of 18 and the balance going into trust for the rest of your spouse's life. When the spouse dies this half reverts to the children.
2) If you are married with no children but there are other relatives, then the spouse receives everything up to £200,000 and again takes your personal possessions.
The rest is divided with half going to the spouse and the balance going to your parents. If your parents are dead then this half is divided amongst your brothers or sisters or their children.
3) If you are unmarried, a shared home may have to be sold if it is not in joint names. The proceeds, along with the rest of the estate will go to your next of kin.
The Order of Distribution for Intestate Estates is largely governed by the Administration of Estates Act 1925 and there are no provisions for co-habitees and stepchildren.
To stop this happening your partner will have to resort to the courts to recover their share of the property and receive any financial support from the estate.
If there are no living relatives the money goes to the Treasury.
The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.