So, with New Year’s resolutions perhaps waning, why not choose one that will give you peace of mind and benefit your loved ones for years to come. Make a Will or update your existing one.
It is a startling fact that according to Royal London, 59% of the UK adults do not have a valid will [1].
It is human nature to find planning for death difficult. Dying “intestate” (without a Will) can have distressing and unexpected consequences. The intestacy laws for married couples in England and Wales set out a strict pecking order for who inherits your estate, with those in Scotland and Northern Ireland each differing. This may not reflect your wishes and can cause family disputes which are often expensive and unpleasant. Furthermore, the timescales for distributing an intestate estate can be lengthy. There is good information from Citizens Advice on this subject if you wish to read further. Finally, if you are cohabiting but not married, or in a registered civil partnership, without a Will your partner inherits nothing!
Needless to say, there are some very positive and compelling reasons why you should make a Will and keep it up to date including:
safeguarding your assets
looking after your family and loved ones by appointing guardians, executors, and trustees whom you can rely on to make the right decisions
mitigating and managing IHT
preventing family disputes
setting out your preferred funeral arrangements and any organ donation wishes
For many people in the UK their largest asset will be their home. Ensuring it is passed on to the right beneficiary and in a tax-efficient manner is an important part of safeguarding assets. A residence nil rate band (RNRB) was introduced from 6 April 2017. This is available when residential property is left to direct descendants. However, the RNRB does come with conditions attached and so may not be available – or available in full – to everyone. It therefore makes sense to ensure that this tax break, which can be worth up to £350,000 for a couple, is properly planned for when you are alive, as part of your estate planning.
Your Will also sets out your wishes for your other assets which include investments, cash deposits, jewellery, cars, business interests and priceless sentimental items including family heirlooms. You also need to consider your digital assets which include the rights and ownership of electronically stored images, videos and even crypto assets. This latter point is quite new given the explosion of the digital world in the last decade. It is an area that requires very careful planning to safeguard your digital assets and privacy while you are alive, but to make these assets known and accessible after death.
We recommend that a Will should be kept up to date and reviewed at least every five years to ensure it remains relevant to your wishes, and more frequently where there are major changes of circumstance.
The case of David
David (63) and Joanne (54) had been in a relationship for three years. David’s adult children from his previous relationship also lived with them. David was in the final stages of divorcing his wife Deborah.
David owned a manufacturing business and had bundles of motivation to work for many years to come. While always acknowledging that he needed to write a Will, he never got round to it as there was always something more important to deal with, in his eyes.
David died unexpectedly leaving a large and complex estate that included the family home, savings and investments as well as his business assets. Dying intestate led to a lengthy and chaotic probate during which time neither the children, his estranged wife Deborah or his partner Joanne had any access to David’s assets. The business was left in limbo and without clear direction, caused severe uncertainty for staff and customers. Joanne had to move out of the home. One can only begin to imagine the distress and tensions that existed between Joanne, Deborah and David’s children.
How do I go about getting a Will?
While there are many DIY Will packages, Mattioli Woods always recommends seeking specialist advice from a suitably qualified solicitor or Will writer. Their job is to ensure the Will reflects your own circumstances and wishes and that it is properly executed and witnessed. Your Will is a vital part of an estate planning strategy covering the provisions for care, gifting of assets and general IHT planning.
Your pension assets
When your Will is being prepared it is worth noting that most pensions you have will sit outside of your estate and are subject to their own death benefit rules. It is therefore important to advise your solicitor how you wish your pension assets to be distributed on death so that there is consistency between your Will and pension wishes, called ‘nominations’. We can assist in updating your pension scheme nominations and those of any other financial products, such as life assurance, that are held in trust.
We understand how much peace of mind you can derive from having an up-to-date Will and knowing your affairs will be settled in accordance with your wishes. This is a great idea for a New Year’s resolution and one your loved ones will thank you for in the future.
[1] -Source: Royal London top five tips for writing a Will. – [https://www.royallondon.com/media/press-releases/press-releases-2021/march/top-5-tips-for-writing-a-will]
