Why make a will?
Did you know that if you die without having made a last will and testament then everything you own could end up going to the state rather than the people you intended to benefit?
For example, if you die leaving family members who are financially dependent upon you (such as a spouse or children), it is the law that stipulates who will inherit your estate. Your dependants may not receive anything at all in certain circumstances. Unless you make a will the intestacy rules decide who inherits and in what proportions. The intestacy rules also determine who will be responsible for administering your estate and you will also have missed the opportunity to plan for inheritance tax.
It is important for homeowners to have a last will and testament because of the effects of inheritance tax. By making a last will and testament, you can make use of tax planning opportunities.
If you die without a last will and testament and you have no relatives beyond a group specified by the law then absolutely everything you own goes to the government.
Thankfully, that scenario is rare because the specified relatives are usually found, although the distribution of your wealth may not be in accordance with your wishes.
Did you know?
- Marriage automatically cancels your existing last will and testament in most cases?
- Divorce cancels the parts of your last will and testament that relate to your ex-spouse?
- Separation has no effect upon the validity of an existing last will and testament?
- Dying without a last will and testament means your cohabiting partner may inherit nothing?
- An unmarried partner has no entitlement to your estate under the intestacy rules. The expression “common law spouse” has no legal effect.
Benefits of making a last will and testament
There are several major benefits to making a last will and testament:
- you can choose someone you trust to administer your estate
- you decide who benefits from your estate, not the law
- you can appoint guardians for young children
- you can leave gifts to friends, family or charities
- you can attach conditions to a gift in your last will and testament or create a trust
- you decide the age a child may inherit
- you can plan for inheritance tax
- you can plan for future long term care needs
- it can help avoid family arguments
- you can make your funeral wishes clear.
Can anyone make a will?
A will can be written by anyone, so long as they are at least 18 years old and of sober and sound mind.
Who should I appoint as executors?
Anyone who you trust. They can always appoint solicitors to assist them. You may wish to consider appointing your partner, children, beneficiaries, friends or a solicitor. It is best to appoint at least two executors and the maximum number is four.
What do the executors have to do?
They are responsible for administering your estate and carrying out the terms of your will. They will firstly need to obtain a grant of probate of your will, count up the assets in your estate, pay any debts, inheritance tax or other taxes and expenses and then distribute the balance to the beneficiaries named in your will.
Normally your executors will be the trustees of any trusts created in your will e.g if there are children under 18 or the age specified in the will, their share will be held by the trustees. In order that the trustees and executors can deal properly and efficiently with matters, you will need to include a range of extra powers in your will
What happens to my will if I marry or divorce?
You would need to make a new will in both cases. If you marry, the will is automatically revoked. If you divorce, any gift to your former spouse and any appointment as an executor will fail.
What about jointly owned assets?
Those assets (such as a house or bank accounts which are jointly owned) usually pass automatically to the survivor and are not covered by the intestacy rules. There are two types of property co-ownership, joint tenants and tenants-in-common. If you are joint tenants your property passes to your co-owner automatically on your death, even if your will indicates differently. If you are tenants-in-common your share will pass according to the terms of your will. If you are considering tax planning, it is always better to hold your property as tenants-in-common so that it will not automatically pass to the survivor.
What happens if I die without a valid last will and testament (intestate)?
- the laws of intestacy determine who will benefit from your estate
- your estate may go to people you did not intend to benefit
- there is no automatic provision for unmarried partners
- you cannot choose who will administer your estate
- it can be more expensive and time consuming to administer your estate
- your estate could end up paying inheritance tax
- you will have missed the opportunity to appoint legal guardians for young children
- children will automatically inherit at 18 rather than at an age of your choosing and, if under 18, statutory trusts can arise which may not necessarily reflect your wishes.