If you do not make a Will, then your estate may not pass to your choice of beneficiary, however, there are also several other less obvious pitfalls.
What can happen if someone dies without leaving a valid Will?
The estate of anyone who dies without making a Will passes under the Rules of Intestacy (the Rules). These state that the first £270,000 of the estate, plus all personal possessions, passes to the spouse or civil partner of the deceased if they have one.
The remaining half of the estate will be split, with half going to the spouse or civil partner and half being shared equally between any children. This can mean that children can receive far less than was intended. The Rules also detail what will happen if the deceased was not married or left no children. They do not make any provision for stepchildren or cohabiting partners.
By making a Will, you have the chance to ensure that none of your loved ones are left out and that your estate will be shared in the way that you would wish.
You can also use your Will to protect your assets from being used in the future in a way that you might not want, for example, from being used to pay care home costs for your spouse. You may also have the opportunity to legitimately minimise the amount of Inheritance Tax payable by your estate.
One of the most persuasive reasons for many people to make a Will is to ensure that those who are left behind know what your wishes are. As well as giving them peace of mind, this can help avoid disagreements or misunderstandings arising after your death. If your estate is involved in a dispute, it could be expensive and use a considerable proportion of the available funds as well as causing a damaging rift to your family.
Five important points to consider when making your Will
When having a Will drawn up, there are many issues you can include, from your funeral wishes to deciding who will receive valuable possessions. Below are five of the most important points you will need to consider:
Who will be your Executor?
Your Will appoints an Executor to deal with the administration of your affairs following your death. This can be an onerous and time-consuming role, so it is important to choose someone who you believe will be prepared to take on the job.
Who will be a guardian for your children?
If you have children aged under 18, you should use your Will to name a guardian for them. If you do not appoint a guardian, for example, because you have not made a Will, the court will decide whom they will live with and there is a risk that it will not be someone you would have chosen.
Who will you appoint as trustee?
You can use your Will to set up a trust to provide for your family. This is useful if you do not want them to have access to the capital you are leaving, for instance, if you do not want them to inherit until they are older. A trust can also be used to protect your assets from being spent where you would not want. If you set up a trust, you will need to choose trustees to deal with the administration of the trust funds.
Who will be the beneficiaries of your estate?
As well as choosing who to leave your possessions and other assets to, you can also use your Will to pass on your estate in the most tax-efficient way possible. This could mean leaving someone a life interest in property, rather than bequeathing it to them outright.
Reviewing your Will
It is important to review your Will regularly over the years, in particular, if there are any major life changes. For example, if you marry, any Will you have made previously becomes invalid unless made in contemplation of the marriage. If you divorce, your ex-spouse will not inherit anything, so again, you should review your Will to ensure that it does not need rewriting.
Having a bespoke Will in place will give you the peace of mind of knowing that your loved ones will be provided for after your death and that you have done all you can to minimise the risk of any disagreement between them.
At Tyto Law, we offer a friendly and approachable service as well as in-depth expertise in Wills and related areas.
If you would like a free, no-obligation initial consultation, please ring us on 01724 642 842 or email us at [email protected].