HomeWills & ProbateWhy Should I Make A Will?

Why Should I Make A Will?

The consequences of not making a Will can be very significant.

If a person dies without having made a Will their estate will be distributed in accordance with the Intestacy Rules laid down by Parliament in 1925.  This is commonly referred to as dying intestate.

For married people with children, the law will allow your husband or wife all your personal possessions and a statutory legacy of £250,000.  Anything over £250,000 is effectively shared by your spouse and children.

If you have no children then in addition to your personal possessions, your spouse or civil partner would receive the first £450,000 of your estate and anything else would be shared equally between your spouse or civil partner and other relatives.

If assets (in particular your property) are held in joint names they will usually automatically pass to the surviving joint owner and will not form part of the Statutory Legacy, or the Estate.  That can have significant Inheritance Tax implications as detailed in our guidance note “Reducing Your Potential Liability for Inheritance Tax”.

Often the home is in one spouse’s name only and would not automatically pass to the surviving partner.  If there are children and the interest in the house is worth more than £250,000 then the spouse’s Statutory Legacy would automatically be used up, (subject to potential arguments that the surviving spouse although not named as a beneficial interest in the property, in any event).  This may leave very little money in the pot for the surviving spouse to live on or may necessitate the sale of the family home especially if the deceased spouse has an interest in the property exceeding the statutory legacy.  This can be particularly significant where there are young children.

If a couple are not married the surviving partner would not have any entitlement under the intestacy rules.

These are a number of other disadvantages of not having a Will when you die:-

  1. Your estate may not necessarily be distributed the way in which you would have wished.
  2. The appointed Administrators who deal with the administration of your estate may not be those whom you would have chosen.
  3. It will take longer for the estate to be distributed.  When a Will has been made, an Executor can take up duties immediately after death occurs.
  4. The costs may be greater.  The costs may be more given that extra time is often spent tracing assets where there is no Will.
  5. Often not all of the assets may be traced.
  6. There may be an unnecessary Inheritance Tax liability.  A properly drawn Will can, in certain circumstances, reduce the potential Inheritance Tax liability.  One of the most common examples of this is a Survivorship Clause.  The significance of Survivorship Clauses is explained in our guidance note “Reducing your Inheritance Tax Liability”.
  7. Children will receive capital automatically at the age of 18.  It may be your wish that capital should be paid at a later date.
  8. A testamentary guardian is not appointed for young children.  Wills are not just for older people.  It is vital for those with young children to make a Will.
  9. Trusts may arise under an Intestacy which can produce complications. The Administrators may not be able to give any money to the child prior to the child reaching the age of 18.  That can be particularly significant when a child requires monies for general maintenance and/or education and does not have the support of a living parent.
  10. There may be friends or relatives who would appreciate a keepsake or you may wish a charity to benefit.
  11. A gift to a child may fail if that child is adopted.

 

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