Blog

22Sept2018

Where there’s a Will there are 500 relatives…

Where there’s a Will there are 500 relatives…

According to a recent survey nearly two-thirds of UK residents don’t have a Will 1. Additionally, 1.5million people who had previously made Wills, failed to make new Wills on getting married – possibly unaware that a marriage will automatically revoke a Will. Likewise, a change in circumstances such as the addition of another child to the family has not been catered for in almost 1 in 10 cases.

Without a valid Will, the law steps in and the ‘intestacy rules’ impose terms on the estate distribution. These rules often conflict with a person’s final wishes, leaving their possessions, money and property to someone they may not have chosen.

Your Will is a legal document by which a person (the ‘testator’) expresses various wishes, the most significant of which is how their assets are to be distributed on their death.

I have set out below some frequently asked questions and answers:

What happens if you don’t have a Will?

If you die without a Will, or without a valid Will, the law stipulates who inherits. These statutory rules are known as the laws of ‘intestacy’, as mentioned above.

You may be under the impression that, if you are married, you do not need a Will as your partner will inherit your estate. This is not always the case. In fact, instead of a surviving spouse inheriting everything from their partner in many cases ‘statutory trusts’ for the children will arise over part of the estate. This creates difficulties for many families and may not be what they want.

Likewise, in the case of unmarried, cohabiting couples, if the property-owner dies, the surviving partner will most likely lose all rights to live in that property after death.

The law will also impose an age of 18 by which children will receive their inheritance. Many people would prefer to increase this to, say, 21, or 25; and your Will is able to do this for you.

When you die, personal representatives of your estate must be appointed, to undertake various responsibilities and duties such as calling in your assets, applying for probate, paying the relevant taxes and distributing the estate in accordance with the law or with the terms of your Will. Without a Will, who undertakes this role is chosen by law, whereas your Will can stipulate who you would like to act as the Executors and Trustees of your Will.

If you have no Will, there is a risk that all your assets end up passing to your partner’s family on your death due to certain legislative rules. A Will enables couples to incorporate ‘mirror’ provisions into their Wills and to share assets out equally amongst respective siblings, chosen charities, etc.

The important thing to remember is that your Will reflects your wishes. Indeed, if someone makes a claim against your estate, the fact that you have made your wishes clear by your Will can help avoid difficult court battles which often cost your estate a large amount of money – not to mention stress for your family.

Why should I use a solicitor, when I can get a cheaper Will through a will-writer?

Will-writers are not regulated and so do not need to have any qualifications, training or expertise to call themselves a will-writer. The complications that can arise with Wills drafted by will-writers are often huge and complex. While you might have saved yourself a couple of hundred pounds in preparing the Will, you risk your estate paying through the nose to fix the problem. Additionally, solicitors are required to have professional indemnity insurance, which can cover costs incurred by your estate if things go wrong!

You work hard for your assets and no doubt care very much to whom your assets pass when you die, so it is vital your Will is professionally and expertly drafted.

There is no ‘one size fits all’. We do not simply prepare the document for you – we offer the advice surrounding this

I have already made a Will, do I need to make a new one or update my Will?

The general recommendation is that you review your Will every 3-5 years with a view to ensuring it is up to date with legislation and in line with your wishes and family situation, which may have changed over time.

If you wish to make a very small change to your Will, we can discuss with you whether a ‘Codicil’ might be appropriate – a Codicil is a legal document that changes specific provision of a last Will and Testament whilst confirming the rest of the Will remains the same. Codicils are usually much cheaper and simpler documents to implement but are not always appropriate so it is important you obtain advice on this.

I am getting married. What do I need to think about and when should I make a Will?

Marriage will automatically revoke a Will you have made previously. However, provision can be made for an upcoming marriage, so you do not need to wait until you are married before making new Wills.

Please speak to us about this if it applies to you.

I have been divorced and now remarried. I would like to provide for my second spouse, whilst ensuring my children from my first marriage are still able to inherit. How can I do this?

You can do this in various ways. It may be appropriate to make a gift of the nil rate band amount to your children (or indeed to a trust) or you may wish to create a trust that gives your spouse a life interest whilst preserving the capital for your children.

There may also be tax efficient ways to cater for this during your lifetime and we can advise you on this.

It is very important you speak with a lawyer about which option is most appropriate for you and your personal circumstances.

Can I protect assets from care home fees?

There are certain things that can be done in order to ring-fence a share of a property and/or cash from care fees should a surviving spouse require care in the future.

Most commonly, a trust known as a ‘life interest trust’ is created to ensure that should a surviving spouse have to go into care, half the house is protected from the local authority and disregarded from a financial assessment.

One of my children cannot be trusted with money. How can I protect them from this and ensure they don’t squander their inheritance?!

Firstly, your Will can leave assets to children in a trust so that they only inherit at an age stipulated by you – it doesn’t have to be 18: an age many believe is a little too young.

There are often complex and personal reasons why someone does not wish to leave money to an individual outright. A trust enables you to leave these funds in the care of chosen trustees who will be guided by your wishes.

For example, if you create a discretionary trust, beneficiaries of this are not automatically entitled to the trust funds and it is up to the trustees to decide who receives what. It is important that you speak with your solicitor about the best option for you and your family.

I would like my Will to provide for a disabled beneficiary, how best can I do this?

There are ways to ensure the disabled individual can benefit from your estate whilst retaining their entitlement to state-benefits.

As long as the trust is properly drafted, a beneficiary may receive funds from a discretionary trust without being penalised by the local authority/the DWP.

There are also inheritance tax reliefs for trusts known as ‘disabled beneficiary trusts’.

Is there any way of protecting inheritance from a child’s divorce or bankruptcy?

Yes. Again, a trust may be appropriate here. With the right trust, funds may be disregarded by the Family Courts when making a financial assessment. Likewise, they can also be protected and kept out of reach of creditors should a beneficiary become bankrupt.

I am dealing with an estate where the deceased did not make a Will. Are there any ways of disapplying the intestacy rules?

Rearranging the estate after death can sometimes be possible by way of a Deed of Variation. This is not always possible or appropriate and may in some cases require the involvement of the Court which can be lengthy and costly without a guaranteed outcome. Please speak with one of our lawyers about whether this might be appropriate.

[1] 2018 survey conducted by Macmillan Cancer Support

This paper is intended to be a brief note for clients and other interested parties. The information is believed to be correct at the date of publication but should not be relied upon as a substitute for professional advice. Please speak to a member of our team.

Georgina Sinha Head of Private Client / Solicitor Tax & Legacy 0203 440 9755