Who Needs a Will Anyway?
For many, writing a Will is something for another day. This is a big risk. Your estate planning should start now, and a Will is the minimum you need. Read on to see why.
A Will allows you to gift your estate (your assets, property and money) to someone you choose when you die. It also allows you to decide who will look after any children, dependants or pets. It can also set out your wishes for your funeral and what happens to your body after death.
Without a Will you are ceding control and leaving all of this to chance. Your property or assets could go to someone you don’t like, or to the government. Your children might be looked after by a relative you would never choose. Or your family might waste away your estate and fall out fighting legal battles for control of whatever you leave behind.
Here are just some of the reasons you should write your Will NOW.
1. Ensure your children (or pets) are cared for
Your Will can and should establish who you would like to be the guardian(s) of your children should you (and anyone else with parental responsibility) die.
Without a valid Will this most important decision would be left to the family court to decide. Not only might this lead to someone you would never choose bringing up your children, but it might also create conflict in your family and lead to your children suffering even more upheaval, fear and distress.
Many mistakenly believe this isn’t an issue. Perhaps you have named godparents, or your preferred guardians have agreed to act, but neither of these are legally binding. Although the court will take into consideration your children’s wishes, this is only one factor and the weight it’s given depends on the age and maturity of the children.
2. Gift to those YOU choose
If you die without a Will (known as dying “intestate”) the distribution of all your worldly possessions is determined by the Intestacy Rules. Under these rules you will have no say in who gets what from your estate.
Indeed, your entire estate could go to a single person who you don’t like but happens to be your parent, or your uncle. There is no option to give some gifts to, say, a child, and others to a parent. Everything you own will go to the first person on the list.
Further, these rules are rigid and, being written in 1925, don’t always fit with modern relationships. See point 3 for a common example of where this can be far from what you might intend or expect.
3. Protect an unmarried partner
It is a popular myth that co-habiting partners have a legal status of common law husband/wife. Unless you live in Scotland, this was abolished well before anyone reading this blog was born. Without a valid Will naming a co-habiting partner as a beneficiary, they will get nothing.
Similarly, ex-spouses are excluded if they were not married at the time of death. Further, even with a Will, if it is written to include a spouse who has since become ex-, they can be neither a beneficiary nor an executor of a Will.
If you want an unmarried partner to inherit from your estate, you need a valid Will.
4. Avoid unpleasant disputes
As a trained and accredited mediator, I’ve seen enough disputes between families over inheritance to know that money can drive a wedge between even the most harmonious families. Not only can such “contentious probate” disputes cause huge stress and unhappiness, but they also burn through the estate. Disputes that progress to a final hearing can take 12 months or more to settle and wipe out more than £100,000 from the estate being fought over.
By setting out your wishes clearly and taking expert advice to make sure your Will is as robust as possible, you can minimise the chances of a damaging and costly dispute breaking out. Your estate planner can explain how to make robust gifts to those you choose; who you should make some provision for to avoid your Will being contested; and how to minimise the chances of anyone benefitting from your estate that you prefer not to.
5. Avoid over-paying Inheritance Tax (IHT)
Inheritance Tax (IHT) is paid at a flat rate of 40% above the threshold (or “Nil Rate Band”). With property prices soaring, more and more people are finding they have estate that will be subject to IHT. Worse still, HMRC often demand the IHT due before the estate’s assets have been sold, meaning executors might be forced to borrow to pay HMRC.
Proper planning can help to reduce the IHT bill on an estate and prepare the estate for any remaining IHT liability so that executors are not left with a huge issue. The rules are complex but one rule of thumb is clear and perpetual: the earlier you start planning the greater the chance of reducing the final IHT bill due on your estate and the more of your legacy can be passed onto those you wish to benefit.