Do you have a will? There are still a substantial number of people in the UK who don’t so you certainly wouldn’t be alone. And if so many Brits haven’t had one drawn up, is a will really that important?
New rules, the Inheritance and Trustees' Powers Act 2014, brought in this month may make you think differently about wills – and what will happen to your estate if you don’t have one.
If you know exactly who you want your money and assets to go to when you die, the only way to guarantee this is done is to write a will. If you don’t, you have no choice who inherits some of your estate.
Let’s look at some examples:
1) Linzi and David have been married for 10 years. They have no children. David’s estate is worth £600,000. When he dies without leaving a will, Linzi inherits all of his estate. His parents, siblings, nephews and nieces receive nothing.
This is one of the changes brought in by the new rules. Previously, Linzi would inherit up to the first £450,000 of the estate plus half of the remainder (525,000 in total), with the other half being divided between David’s surviving blood relatives. Under the new rules, if David wants any of his estate to go to his parents or any of his other relatives, or friends, he must stipulate this in a will for it to happen.
2) Ian and Sandra have been married for 30 years and have one child. Sandra dies leaving behind an £800,000 estate but no will. Ian inherits the first £250,000 of the estate plus half of what remains (£275,000). The couple’s child inherits the remaining half. If Ian and Sandra had two children, the remaining half would be divided between them, and so on.
This is another change. If Sandra wants more of her estate to go to her children, she will need a will.
3) Rafael and Pete are civil partners and have no children. When Rafael dies leaving behind a £500,000 estate, Pete inherits all of it.
This is one of the biggest changes to the rules of inheritance; previously civil partners did not have the same rights as spouses.
4) Kim and Paul have been together for 15 years, share a home and have no children. Kim dies leaving behind an estate worth £300,000 but no will. Paul inherits nothing.
This is one rule not to have changed with the new inheritance tax; so-called common-law partners do not have the same rights as spouses and civil partners so unless a will is left that makes clear what they should receive if their partner dies, they won’t receive anything.
So the lesson is if you want a say in where your money goes after you’ve died, it’s vital you make your wishes clear in a will.
Easier than you think
Luckily, writing a will is more straightforward than you think. It’s best to get professional advice (such as from the likes of Citizens Advice), but you can write your will yourself. However, you must get is signed by two witnesses to make it legally-binding, so there’s no point writing it, not showing anyone and leaving it in a drawer for someone to find. You should also keep in mind that you are not allowed to leave anything to your witnesses in your will.
More than money
If you’re still wondering whether there’s any point writing a will, remember it’s not just about your estate. Other important things a will can stipulate include details of your funeral, who will look after your children when you’re gone (if they’re under 18) and who will take responsibility for ensuring your money and belongings are divided up and go to the people you want them to. A will can also speed up the process of splitting up your estate.
And if you’re over 55 years old, you can take advantage of Free Wills Month, which runs throughout October in England and Wales. Successful applicants can have their wills either written or updated for free by one of the solicitors taking part in the campaign. You can find out more here.