Do I really need to make a will?
Making a will can protect your loved ones after you die and ensures your estate is dealt with in the way you choose.
Whilst most people are familiar with the concept of a will, a recent survey by Will Aid showed that 49% of people in the UK don’t have a will, with 14% of those presuming their loved ones will automatically inherit assets when they die.
Sadly, this is a common misconception but may explain why so many people in the UK haven’t actually taken out a will.
Why make a will
Death isn’t an easy topic to discuss. But, if you’ve ever had to deal with someone’s estate without a will to refer to, it’s a conversation you’ll wish you hadn’t overlooked. We always ensure that’s it’s a priority item when talking to our clients.
Top reasons for making a will include:
- Ensures your children or step-children are provided for financially
- Protects your partner if you’re unmarried
- Looks after your family home
- Avoids any family disputes in the future
- Prevents paying more Inheritance Tax than you need to
- If you’re recently married, it’s important to create a new legal will, as your existing will, will become invalid.
- Decides who would be in charge to carry out any of your final wishes
- Ensures there’s someone to look after your pets and be in safe hands
- Protects your digital possessions, such as photographs, websites, social media accounts
- You may wish to leave a donation to a charity that is close to your heart
What happens if I don’t have a will?
If you die without a will, it means you have died ’intestate’. When a person dies without leaving a valid will, their estate must be shared out in line with certain rules and regulations. These are called the rules of intestacy.
What each person’s estate is worth will vary. Once any tax and debts have been paid, the first £250,000 of what remains; your personal possessions and half of any outstanding wealth, will go to your spouse or civil partner. The rest will go to your children once they’ve turned 18. And that’s only if your estate is worth more than £250,000.
What could this mean for me?
If you passed away without a will and died intestate, your estate is usually administered by the next of kin. The administrator can’t just divide the estate up as they wish. They must stick to intestacy rules set out by the UK government.
Fundamentally, this is what it could mean in reality:
- If you’re not married to your partner, they could receive absolutely nothing, even if you’ve lived together for many years.
- If you’re separated but not divorced, your ex-husband or ex-wife will have a legal claim to part of your Estate.
- Your spouse or civil partner will inherit everything, so conceivably, your children might not receive a penny!
- If you don’t have any living family members, all your assets will go to the state.
It’s a scenario our Financial Planner, Jack Farmer, often comes across, as well as the unfortunate impact it can have when your will is not up to date.
“The example I often use is of Jenny who is a sole director and owner of Wills & Estates Limited. She has two children from a previous marriage, James (age 23) and Samantha (age 24), although she is now separated but never went through a divorce.
The business is Jenny’s pride and joy, having started from scratch 15 years ago. The business has a value of £1m. James and Samantha work in the business and Jenny wants them to take over the business if anything happened to her.
Jenny drafted a will many years ago just after she got married and she was under the impression that as she’s separated, her ex-spouse wouldn’t benefit under the will. Instead, all the benefit would be passed on to her children. As the will was written many years ago, James and Samantha were both young, so everything was left to Jenny’s ex-spouse as this was what she wanted to happen at the time.
Jenny unfortunately passed away and, as a result of her will not being updated, her estate was not distributed in line with her true wishes and was left entirely to her ex-spouse. As a result, James and Samantha were left with no inheritance, and more importantly the business wasn’t in their control. This can create not only significant legal and financial consequences for James and Samantha, but also have an emotional impact too.’’
Take control of your Estate!
With the above in mind, it’s clear it’s in the best interests of both you and your loved ones to draw up a legally binding will. It will ensure your assets will go to your chosen beneficiaries and that nobody you care about is left out, preventing any unwanted family disputes in the future.
There’s always going to be changes in your life, and your will may not always reflect the changes that might have happened since the original document was written. There’s also updated rules in law and tax systems that could have a personal impact. Once you have taken out a will, it’s beneficial to keep it up to date and review it every 3-5 years.
Take control of your estate, and protect your family from unnecessary stress at what’s already going to be a difficult time for them. Most of all, it will give you invaluable peace of mind that your wishes will be respected.
