1. Avoid Intestacy rules
2. Tax planning
3. Choose your Executors and Trustees
4. Funeral instructions
5. Peace of mind
1. Avoid Intestacy rules
There are many reasons why it is sensible to make a Will. First and foremost, in the absence of a validly executed Will, you will be treated as having died intestate and the State rather than you will direct who inherits your property, potentially neglecting those you care about the most.
1.1. Cohabitants
Under the Intestacy rules, cohabitants are not afforded equivalent rights to married couples and civil partners. This can result in people who have lived with their partners for years but have not married or entered into a civil partnership, being left with nothing on their partner’s death.
1.2. Surviving Spouses / Civil Partners
If you leave a large estate, then under the Intestacy rules your spouse or civil partner will have to share your assets with your children or other family members in a way that could leave them without sufficient income to live on. Such rules can even force a sale of the matrimonial home in cases where it is held in the name of only one spouse, and therefore does not pass automatically to the survivor. Please note that there is no Inheritance Tax payable on assets which are passed by one spouse or civil partner to the other.
1.3. Children and dependants
Appointment of Guardians: If you have children and dependants who may not be able to look after themselves in the event of your death, you can direct in a Will who will take care of them (i.e. appoint Guardians). The absence of a Will is likely to cause uncertainty and add to the already considerable stress family members will inevitably be going through.
Age contingencies: It is also important to remember that without a Will, any children you have will receive their inheritance on reaching eighteen. A substantial inheritance at such an early age could act as a disincentive to undertake or continue in higher education or may result in the beneficiary spending their inheritance with less consideration for the future than would be expected of a twenty-five or even twenty-one year old. By setting up a trust in your Will, you can ensure that your children will not become absolutely entitled to capital until reaching a more responsible age.
Claims against your estate: Conversely, a Will enables you to justify in advance any failure to leave money to those who might have been expecting it. Under the Inheritance (Provision for Family and Dependants) Act 1975, certain categories of people could be entitled to make a claim against your estate if they depended on you financially prior to your death and feel that you have not made adequate provision for them. In this situation, the process of drafting a Will gives you the opportunity to set out your reasons for not doing so explicitly, potentially making it more difficult for such people to pursue a claim.
2. Tax planning
A well drafted Will can help ensure that your estate pays no more tax than is strictly necessary on your death. It is best to discuss the options carefully with your solicitor. Please note there is no Inheritance Tax payable on monies or assets which are passed by one spouse or civil partner to the other or to UK registered charities.
3. Choose your Executors and Trustees
A Will also gives you the opportunity to decide who will administer your estate on your death, devoting the time necessary to ensure that your personal affairs are settled and your wishes, as expressed in your Will, are carried out. The administration of an estate can be a long and challenging process, and selecting the right Executor is very important. In the absence of a validly executed Will, the order of people who are entitled to deal with the administration of your estate is set out by statute. This may result in the appointment of Administrators you would not otherwise have chosen.
4. Funeral instructions
If you care about what happens to your remains when you die, you should set out your wishes in a Will to ensure that they are carried out. Although your friends and family may already have an idea about what you want to happen, a Will provides certainty and avoids the confusion that can ensue from the potentially conflicting interpretations of orally expressed wishes.
5. Peace of mind
Perhaps most importantly, a Will allows you to carry on with your life, safe in the knowledge that the difficulties that may confront those close to you after you have gone have been considered and prepared for.
These notes are not exhaustive and are meant as a basis for discussion with your legal adviser. If clients wish to discuss any of the above, please contact our Private Client Team 020 8940 4051 who will be pleased to help you
IMPORTANT: this information is intended to be a general statement of the law. No action should be taken in reliance on it without seeking specific legal advice.
