If you die without having made a valid will, you will have no say whatsoever in what happens when it comes to the distribution of your estate. Instead, the rules of intestacy will come into force and take over in dividing your estate in a legally predetermined way. Your estate will be split amongst specific members of your family in a specific order as laid out by law and this may not be to the people who you wanted to benefit. Furthermore, the intestacy rules may not take account of tax-related issues when it comes to distributing your estate. It is estimated that as many as 60% of people don’t have wills.
Also known as your last will and testament, your will is a legally-binding document but if you don’t prepare it properly, it may not be valid. It is fine to write your will yourself but if you have a complicated estate, maybe several properties or multiple savings accounts for example, it might be wise to get assistance in doing so. Of course, even in a straightforward case it is wise to seek assistance in distributing your assets. It is important to know that what has been intended is what will be carried out. It is always wise to enlist the support of a solicitor or expert will-writer.
We believe everyone should make a will but here are just some of the reasons why it is so important to do so, whatever your age and stage in life:
1. Make provisions for your children
Perhaps the most important aspect of a will for those with young children or guardianship of a minor under the age of 18… who is going to take care and responsibility for your dependants? This needs some thinking about. If you don’t make this clear in your will then the decision may be left to the family courts, who may very well choose a person you wouldn’t agree with or that would not be suitable to take care of your child/ren. Your children may have god-parents, aunts and uncles, which to many would be obvious choices in ensuring the continuous care of your children but it is quite possible the courts will have other ideas.
2. Ensure financial security for your children
As well as stating who will raise your children when you die, you can make plans to provide for them financially. You might have certain amounts of money set aside for their education, past-times, holidays, housing and upkeep. The only way to make sure your children’s financial future is secure in this sense it to make financial provisions in a will.
You might want to think about setting up a trust in order to provide for your children. This is one way of retaining an element of control over when your children receive the money, and how it is used.
You can set up a trust in one of two ways: you can set it up whilst you are alive or you can leave instructions for its setting up for after your passing away.
3. Provide for your step-children
The law states that only children related by blood (or adopted children) will automatically inherit where there is no will. Your step-children may be a big part of your life, or might even be the only children in your family but this means nothing when it comes to inheritance and the law. If you want to provide financially for your step-children or want them to inherit anything whatsoever, you’ll need to write a will that names them specifically as they will have no claim if you die without doing so. The same goes for any other children and dependents who may rely on you for support.
4. Protect unmarried partners
Unless you have specifically named them in your will, unmarried partners aren’t entitled to anything whatsoever from your estate. The amount of time you have been together has no bearing on the matter either. If you want to leave a share of your estate to your partner it is essential this is stated in your will as the law will be of no help to them should you die without doing so.
5. Protect your family home
If your family home is in your sole name, your unmarried partner and step-children do not automatically inherit it should you die without having written a will. This could very well mean they may lose their home as they have no legal hold on the property once you are not there. It is very straightforward, providing it is done correctly, to leave them a share of the property in your will, or if not, it is possible to leave them with a right to reside in the property for a stated amount of time.
6. Avoid family disputes
Sometimes dividing up an estate can sadly lead to family disputes and large scale disagreements amongst those you have left behind. This is easily avoidable by making your wishes clear before you die. If it comes to a member of your family deciding to Contest your will this can be highly damaging to family relationships. It can also be very expensive if legal assistance is sought. This can all be avoided if your decisions are set out clearly and legally before you die. You can rest assured that relationships will not be tested as a result of a legality.
7. Inheritance tax issues
Inheritance tax is a concern for many when considering their assets. The amount of inheritance tax that is usually charged depends on what you have, and who you leave it to. The total amount is worked out according to your estate’s overall value.
It is unlikely you will have to pay Inheritance Tax to pay if:
- the value of your estate is under £325,000
- you leave everything above £325,000 to your spouse, civil partner, a charity or a community amateur sports club.
According to the Government website: ‘If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren your threshold can increase to £475,000.
If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £950,000’.
8. You have recently got married
When you marry, any will you made prior, automatically becomes invalid (England and Wales only). According to the legal rules of intestacy, this means your estate could be split between your new partner and children from a previous marriage. This might not be your wishes and could leave many problems to sort out amongst your survivors.
If you are in Scotland, prior wills are not automatically invalidated by marriage meaning if you die, your new spouse may not inherit anything if your old will does not include them. Another huge problem that could be solved by updating your will.
Again, getting divorced doesn’t necessarily override your will. Your ex-partner may still be able to inherit from your estate.
It would be wise to regularly review your will to make sure it still reflects your situation particularly after a marriage or separation.
9. Who will take control?
When you write your will you can name an executor, or several in fact, who will take control of organising your final wishes. By deciding upon an executor before you die, this allows you to choose the best person for the job. You might want to let them know before you die so it is not a shock at the time.
10. Do you have animals?
Whether you have an old cat or a stable of horses, your animals will need to be looked after if you pass away. A good idea would be to let your survivors know what your thoughts on the matter are before you die. It would be unfortunate should you leave several animals to a reluctant beneficiary.
11. Digital accounts
Whether you run a lucrative online businesses, have a high following as an influencer or simply organise your bank accounts and do a weekly online shop, digital accounts such as itunes, facebook, or business websites, form a part of your possessions and can disappear or be misused if you don’t leave instructions in your will. Online information, believe it or not, also forms part of your legacy. The information might need to be either destroyed or protected. Both are as important as the other
12. Give to charity
If you already support a charity, you may wish to leave them something when you pass away. Although this is a nice gesture, it could also potentially reduce the amount of inheritance tax you pay. If you leave more than 10% of your assets to charity, the inheritance tax rates change.