Last week I met with several families trying to put their estates in order and to plan for their eventual demise. What was very interesting was the fact that many, as well as having no Inheritance Tax Planning in place, did not even have the basic estate planning tool of an up to date Will.
Clients are always surprised to learn that if they die their estate will rarely be distributed as they would expect and those clients that think their spouse will simply inherit everything, and are very surprised that this is often not the case.
With a significant number of individuals in the UK dying without a Will, intestacy is a very real issue that affects many families.
By not having a Will, the distribution of your assets will depend on a number of factors prevailing at the time of your death such as the number of surviving relatives and their relationship to you rather than your wishes.
Due to the way in which the intestacy rules operate, your assets could pass to individuals who you would not have chosen, whilst ignoring those closest to you. For example, if you are in a long term relationship, but have remained unmarried, under the rules of intestacy, your partner will be entitled to nothing.
Equally, if you die without any living relatives or, having made exhaustive enquiries, they cannot be traced, your assets will pass to the Crown – something few of us would have chosen.
Whilst most people can identify the benefits of having a Will, the reasons given for not having one are more often based upon misconceptions, rather than reality.
They are too expensive
Although there is a cost in drafting a Will, these are relatively modest, when compared with the costs that can be incurred when administering the assets of a person who dies intestate. In addition, by not having a Will, you may be passing up the opportunity to save tax and provide long term asset protection for future generations.
I don’t intend to die any time soon
Whilst death is one of life’s certainties, most of us don’t know, with any certainty, when we will die. With the average life expectancy of men and women increasing, you could be forgiven for thinking that time is on your side. Unfortunately, as this is an average, for every person who survives beyond the average, another will die earlier.
I will get around to it eventually
Although you can make a Will at any time, you must have mental capacity. Whilst you may currently enjoy good health, if you were involved in an accident or suff ered a serious illness, this may result in you losing mental capacity. While under these circumstances, your family could, at significant cost, approach the court to arrange a statutory Will, this may not fully refl ect your wishes.
I don’t have enough assets to justify having a Will
Wills aren’t just about managing your assets. They can also address practical issues that can arise as a result of your death, such as who will look after your children, together with your funeral arrangements.
I don’t have the time
Although making a Will should not be taken lightly and will require you to spend time thinking about your wishes, the process of arranging a Will should, in most cases, only take a matter of hours. Although we all lead busy lives, if we don’t find time, we will be leaving our families with extra work, and avoidable expense and complications, in administering your assets.
I haven’t given any thought to who I want to benefit from my assets
Although you may not have a clear idea of who you would like to benefi t from your assets, most people are able to easily identify people who should not. If you would like to take control of who should benefit from your assets, there is no alternative other than to arrange a Will. It is important to remember that, in the event that your wishes change, it is possible to update your Will at any time.
I don’t need a Will as everything passes to my wife automatically
Unless all of your assets are jointly owned with your wife, or your wealth is relatively modest, your wife will only be one of a number of individuals who will benefi t from your assets.
Please note: Wills are not regulated by the Financial Services Authority and Will writing involves a service that is separate and distinct from those offered by St. James’s Place.