What happens to your property or savings when you pass away?

While there are legal processes in place which ensure that property will stay within the family wherever possible when a person dies without a will, it is equally valid that these processes; what lawyers call “the rules of intestacy”; may not reflect the exact wishes of the deceased person.

wills For initial advice about making a Will or to get a quote, contact one of our Wills Solicitors.

What is the rule of intestacy?

Rules of intestacy are applied when there is no will in place and determines who inherits the estate. When a person dies without leaving a valid will, their property (the estate) is shared according to specific rules. Intestacy rules set down a priority list of people who inherit an estate after death. The first to inherit is a surviving spouse or civil partner, which is then followed by children within the family and so forth.

Alarming wills statistics in the UK

The number of people in the UK without a will is at an all-time high. According to new research, around 60% of UK adults don’t have a will, and approximately 31 million people now risk dying without a will.

Astonishingly, 5 million people do not understand the procedures to get one. There is some evidence that 2 out of 3 people die without leaving a valid will. Unfortunately, there is no way to tell whether what happened to the remaining property was what the deceased wanted. However, a lawyer will have to demystify the rules about wills and even if you have one, the importance of being aware of the contents and updating it as necessary.

Interestingly, there is so much more to write about wills. However, we’ll cover the critical area of law to enable you to have a better understanding of what to consider if you need a will.

What is a will?

First, what is a will? Wills are, frankly, practical documents. Provided that they are drafted correctly, they are a binding document which sets out to the world at large what you want to happen to your property when you die (we call this the estate). In a will, you can leave sums of money to family members, friends or business associates. You can establish trust funds for young children. You can donate to charity or even set out whom you would like to look after your children if they are under 18 when you die. They are functional documents which say, without uncertainty, how you wished to organise your affairs and whom you want to act on your behalf.

When do you need a will?

The simple answer to this question is if you have a property (whether it’s money, houses, valuable artwork, for example) in your name then you should consider having a will. Buying a home, getting married or divorced, getting a financial settlement are all examples of situations where you should consider either making or revisiting a will. Most people are not aware that getting married will invalidate a will, unless there are particular circumstances which might apply. This could mean that even if you had previously made provision for a will, you might die without a valid will.

What do you need to make a will?

The most significant aspect of preparing a will for both lawyers and clients are the stringent rules which apply to wills. Often, even a small lapse can render a will invalid. A person making a will (the ‘testator’) must understand the consequence of what they are doing (it’s called the ‘capacity’), and they must want to make a will (‘intention’). Without these, even a beautifully crafted and executed will cannot be valid. Literally, it will not be worth the paper it’s printed on.

Formalities which go into making a will

A will must be:

in writing (whether it’s handwritten, typed or printed)
signed by the testator, and
witnessed by two independent witnesses (people who do not benefit under the terms of the will and are not the spouse/civil partner of the testator)

Although there is no requirement for this, a person making a will should also choose whom they want to act on their behalf (the ‘executors’). Executors can be professionals like lawyers or accountants or even family members such as grown-up children or husbands/wives. If no executors are appointed in a will, the court will appoint someone suitable which may be a person not familiar with the testator or their wishes.

Clients who instruct a lawyer to prepare a will on their behalf are many and varied. Usually, the amount of capital is small, and the testator wants to ensure that the small amount that they have, goes to the right person. For example, a client who has a disabled child may wish to have more money set aside to look after that child rather than their siblings who are more successful and lucrative in their own right.

At the other end of the spectrum, the lawyer will prepare a will for a client who is financially well off and needs advice on how best to make their will. It may be how their family is looked after, and their tax liability is minimised.

What is Inheritance Tax?

Inheritance tax is a tax on the estate of someone who’s died. Inheritance Tax is an emotive subject for people who have worked hard to build up their assets. This can be a substantial burden on an estate. Currently, tax is paid at 40% on anything over £325,000. Fortunately, with good advice, there are ways that this liability can be minimised. If someone were to die without a will, it might not be possible to protect assets. Unless tax could be raised, that properties and heirlooms are sold off to pay HMRC. There are several types of tax which affect estates, besides Inheritance Tax, and it is crucial that you seek advice from a wills solicitor on these.

Costs of making a will

Wills are not always expensive documents to create, and you can have a great deal of choice in buying a DIY kit online. Though off-the-shelf packages appear attractive at first glance, if you don’t fill it correctly or follow the procedures in place, it could well be invalid. Heading to court to clear up a poorly written may cost you as much as 10% of your assets in court.

It’s advisable to consult a wills solicitor, and some will prepare a basic will from £100 + VAT. If a matter is complicated, then a solicitor can advise on this and provide a quote for any additional work.

By way of a small parting anecdote on considering a will; think of a couple going through a divorce. The wife has a great deal of jewellery. Unfortunately, she dies before they complete the divorce. According to the rules of intestacy, the jewellery will become the property of the husband, notwithstanding that they were seeking a divorce. The wife’s family could not make any claim on the property. While this might be a sombre note to end on, it is a critical point to make that had the wife made a will when she knew that she was going to get a divorce, ensuring that the jewellery and her other personal effects would end up with her family which, ultimately, would have satisfied her needs.

Here’s hoping the same fate doesn’t befall someone close to you, so why wait? Visit Qredible.co.uk and contact a wills solicitor now.