Recently published figures show a rise in the number of families who are left having to deal with the consequences a family member dying without a Will in place (known as ‘intestacy’).
Indeed, a poll conducted last year by YouGov found that nearly two thirds of UK adults have not written a Will. What’s surprising about this is that the rewards from preparing a will are many, and tremendously valuable. So why do so many of us put it off? There is a cost of failing to put this important document in place, not just to ourselves, but to our family who are left behind to sort things out. A will is a most critical, but often neglected part of a sound estate plan and intestacy often produces unsatisfactory and upsetting outcomes for family left behind.
Here are 6 potential problems that can occur for your family if you do not have a Will.
1. The only people who end up benefiting from your Will are the lawyers
If you haven’t stated in a Will who is to benefit from your estate, the law decides for you. It doesn’t matter what your relationships with your family and friends were like during your life, the same intestacy rules apply to everyone. This leads to frequent legal challenges from financial dependents and relatives who don’t inherit under the intestacy rules. In claiming that they are entitled to financial provision, your estate can be led into long, drawn out cases over who gets the assets. This is particularly relevant to modern family relationships where couples may be unmarried, or in second marriages.
Consider how little a will costs to set up in comparison to how much legal fees can cost when there are problems with an estate. Of course the deceased will not be around to witness the stress and frustration this causes, but your family will be left feeling the consequences of it for many years to come. This may not be the legacy that you want to leave behind.
2. You don’t get a say in who looks after your children
If you die without a Will in place, you have not selected guardians for any children you may have under the age of 18. This means that the Public Guardian (the government) may be involved in your children’s personal lives. Any parent knows how important it is to make sure that your children are in the hands of someone you want and choose. Otherwise, well meaning family members could spend years fighting for parental responsibility. Surely the only person who should make this decision is you, and you can do this in your Will.
3. What would you have done with a large inheritance at 18?
Under intestacy rules, your children have full and unfettered access to any money they are due (which may not be anything depending on the size of your estate) at age 18. It is unlikely that you would choose this as the best thing for them. At this young age, children have little experience of life or of managing finances. Nor are they typically settled in careers or relationships. Having access to a large sum of money may lead them to making decisions that are different to the ones they would have made if they were a little older and wiser.
In your Will, you can state the exact age you want your children to inherit. In the interim it can sit in the safe hands of people you choose to manage it responsibly. This saves your children from experiencing a few years of wild abandonment – and a lifetime of regret
4. Fighting over the small stuff
Often the biggest and longest lasting family disputes are over the personal belongings of the deceased. It is usually the dividing of personal assets that creates the most trouble – you cannot divide a diamond ring or family photograph three ways! At times of grief, these disputes can take a life of their own, beyond logic and beyond anything the deceased would have ever wanted for their family. It is so important to plan ahead to avoid potential conflicts – and putting a set of rules in your Will to deal on how to disperse personal assets can help maintain family relationships long after you have gone.
5. Your family may have to write a cheque to HMRC that could have been avoided (and within 6 months of your death!)
Once you have died it is too late to take advantage of tax savings that you could have made with some forethought as part of making your Will. This includes considering the residence nil rate band due to come into force from April next year, as well as any transferable nil rate band available. Tax savings that can also be achieved through owning qualifying business assets and making strategic gifts. If you have an estate in excess of £325,000 (£650,000 for a married couple) your family will thank you for seeking advice on how to reduce your tax bill. The cost of advice may pale into insignificance in comparison to the inheritance tax savings.
The bottom line is you can avoid a lot of these potential problems if you plan ahead and make a Will. With a little awareness, those of you who do not have a will, may start thinking about getting one.
Nicola Sunderland TEP makes writing your Will easy. We offer a fixed price that includes a free initial consultation at your home.