trustee tesponsibilities

Why Make a Will?

Prince. Aretha Franklin. Jimi Hendrix. Just some of the major celebrities who are said to have died without having made a Will.

It goes to show that Wills are still not seen as an essential part of personal planning. They are not mandatory. You don’t have to have one. But they really can affect the way in which your estate (the things you own) will be dealt with after your death.

When a person dies without having made a Will, they will have ‘died intestate’ and the rules of intestacy apply. It is significantly different to a situation in which a Will has been made.

Whereas a Will appoints a particular person or a number of people to be the executor(s) to carry out the terms of the Will, no such certainty exists in an intestacy situation. This means that it is up to a person – usually a family member – to come forward and be prepared to take responsibility for dealing with the deceased’s estate. They must apply to the court for a ‘Grant of Letters of Administration’ in order to be able to do that. However, before making that application they must have established some important things about the estate. These include:

  • the value of the deceased’s assets, including property and shares;
  • the deceased’s debts;
  • any gifts the deceased made in the seven years leading up to their death; the value of those gifts; and whether they could attract Inheritance Tax.

That is often a laborious task, not least because the information is unlikely to be found in one place. Where someone has prepared a Will, there is a chance that they will also have made some attempt to organise their affairs. They might have created files of relevant documents, for instance. Someone who hasn’t prepared a Will is less likely to have addressed their minds to the things that will need to happen after their death. And this presents administrators with a very real challenge. They may be starting from scratch – having to dig around, ask questions, trace people and accounts, scrutinise documents. It can all take up a great deal of time, and doesn’t always result in firm answers about the extent of the estate. But it has to be done.

That is one significant aspect of intestacy. Another is to do with the way in which the estate is distributed. It is often assumed that loved ones will inherit even if a Will is not in place. That is not a safe bet. Where a person dies intestate, the law (the rules of intestacy) specifies who should receive what.

If the deceased’s estate is worth less than £250,000, everything passes to that person’s husband, wife or civil partner – even if they had separated or were going through a divorce or dissolution. Children do not stand to benefit straightaway unless the estate is worth more than £250,000, in which case the children will share the amount over £250,000 equally with the deceased’s husband, wife or civil partner. So, if the estate were worth £750,000, the children would get a share of £500,000.

Unmarried couples, or those that are not in a civil partnership, are particularly vulnerable. When a partner dies, the other is not entitled in law to anything, possibly with the exception of some jointly owned possessions. Blood relatives come first, regardless of how long the partners had been together or the strength and outward appearance of their relationship.  Living ‘as common-law husband and wife’, for example, doesn’t cut it.

These situations can cause problems within families. They can cause rifts, and even lead to legal proceedings where a person who was dependent on the deceased claims that they have not been properly provided for. While that type of action is sometimes vital, it can take its toll on relationships, particularly if it is not managed well.

That’s why we always encourage people to make a Will. A Will places the person making it in control, removing many of the challenges that could otherwise face loved ones in an intestacy situation. It allows you to choose beneficiaries, as opposed to the law determining who should benefit from the things you worked hard to accumulate. It could also mean that beneficiaries stand to gain more; as part of the process, your solicitor will help you structure your estate tax-efficiently.  And when all plans are in place, you’ll have peace of mind that the job of distributing your estate should be relatively straightforward – and that the ‘right’ people are properly provided for.

If you are looking for a New Year’s resolution, perhaps making your Will should be it.

For advice about any aspect of Wills and estate administration, contact us 0808 256 2917 or email [email protected].