10 reasons to write a will
30 November 2021
14 December 2021
Historically, statistics have shown that a large proportion of the UK population do not have a will. In this article I look at some of the reasons as to why it is advisable for individuals to have a will in place and some of the factors that ought to be considered.
- Protecting assets
In cases where an individual dies having not written a will, they are deemed to have died intestate. This means that, in England, their assets are distributed in accordance with the Administration of Estates Act 1925 - so the law will decide who should inherit their assets. Even though the intestacy rules are designed to protect the individual’s family, this can still cause several problems, especially for those who are not married or in a civil partnership. This is because partners have no automatic rights under English law. Equally, for those who are separated but not divorced, their spouse or civil partner would inherit part of the estate on intestacy. Further, if there are no close relatives, assets could pass to distant relatives whom the deceased had no intention of leaving assets to, or, if there are no relatives, assets could pass to the Crown.
- Ensuring the right individuals benefit
Following on then, one of the most important reasons for writing a will is to ensure that assets pass to the correct people on death. It is possible to specify who should benefit and also identify whether certain individuals should inherit specific assets – so, for example, particular items of jewellery, paintings, other personal possessions, collections, etc…
- Appointing executors
It is important to name who should act as executors. The executors are responsible for dealing with the administration of the estate. This means that they have to complete the inheritance tax account, pay any inheritance tax that may be due and apply for probate, if required. Upon grant of probate they then have the legal right to deal with the estate - so once any debts, taxes, expenses, etc., are paid they can then pass assets on to those who are entitled to benefit under the terms of the will.
- Ensure the will is valid
Broadly, for a will to be valid it must be written by an adult, so aged 18 or over, who is of sound mind. It must be in writing and signed and dated in the presence of two adult independent witnesses. So, it cannot be witnessed by anyone who may be able to benefit under the terms of the will. Currently, due to the pandemic, it is possible to remotely witness a will and this will be possible until at least January 2022.
While there is no requirement for a will to be written by a solicitor it is often recommended because they can ensure that it is properly worded to reflect the individual’s wishes.
- Tax planning
It is also advisable to ensure that the will is written in a way to maximise tax savings. Prior to the introduction of the transferable nil rate band, in many cases the nil rate band was often wasted on first death by leaving assets to a surviving spouse/civil partner which would otherwise pass exempt. Many couples now rely on the transferable nil rate band rules to ensure use of the nil rate band on second death. That said, given that the nil rate band has remained at £325,000 since 2009/10 and is expected to do so until 2025/26, for some, making use of the nil rate band on first death ought to be considered. This reduces the value of the estate on second death, which can be beneficial for the purposes of making use of the residence nil rate band and also any growth will be outside of the estate of the second person to die.
The will can therefore be drafted to maximise inheritance tax savings. And, for those who wish to leave assets to charity, if 10% or more of the net chargeable estate is left to charity, the rate of inheritance tax payable on the taxable estate is reduced to 36% instead of 40%.
- Appointing guardians
In cases where there are minor children involved, it is advisable to name any guardians that should look after the children upon death of the parent(s), otherwise the family courts will decide where the children should go. It is advisable to consider the ages of such children and what provision is likely to be needed for them. A will can ensure that children will be properly looked after, because funds can be set aside for their benefit – usually by including a trust to that effect in the will.
- Deciding what should happen to any pets
In cases where there are pets, it is also advisable to consider what should happen to them. Would a family member be prepared to look after them? What provision is needed for them? Ideally, a friend or family member would be happy to act as a guardian and funds could be left to that person which they can then use to look after any pets.
- Dealing with any digital assets
Over recent years, with the popularity of social media, including email, it is advisable to include what should happen to any digital assets within the will. It is possible to name a digital executor in the will to manage these assets on death and it is advisable to include information on how such digital assets should be handled, for example, whether an account should be closed or not and what should happen to any photos and videos.
- Provide funeral instructions
A will can also include other wishes, for example what kind of funeral the individual would like. Some people may have strong feelings about whether they wish to be buried or cremated, whether they would like certain songs played or certain readings read. All of this can be specified in the will, thereby reducing the burden for loved ones as it provides them with guidance on the individual’s overall wishes.
- The need to update/review a will
It is really important to review a will whenever circumstances change, for example, if the individual gets married, divorced, becomes a parent or receives an inheritance.
If they already have a will in place and get married or enter into a civil partnership, the will is automatically revoked and so a new will would need to be made. The same rule, however, does not apply if they get divorced or their civil partnership is dissolved. In that case, anything left to the ex-spouse/ex-civil partner in the will would be dealt with as if they had died on the date that the marriage/civil partnership legally ended. This means that any gifts/assets which may have been left to the ex-spouse/ex-civil partner will no longer pass to them, although the provisions in the rest of the will would usually be valid and so could cause unintended consequences where the individual’s circumstances have changed and they wish to redirect assets to other people. Whatever the ex-spouse/ex-civil partner was set to inherit would then be passed on to the next beneficiary who is entitled to it, in line with the terms of the will. If everything had been left to the ex-spouse/ex-civil partner, with no other beneficiaries named, then the estate would be dealt with under the intestacy rules. Therefore, if a will is not updated to reflect a divorce or the dissolution of a civil partnership, the estate might be divided up differently to how it was intended. This could mean that new partners or dependants aren’t provided for.
While this provides an overview of some of the aspects that ought to be considered in relation to writing and reviewing a will, most importantly, clients ought to be aware that writing a will can save time and stress for loved ones as it makes it easier for them to sort everything out on death.
This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), the CII group, local institute or Society, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the CII group, local institutes, or Societies.