Don't leave a financial mess after you die – make a will
More than half of us haven’t written a will, which means we could be leaving behind an administrative nightmare when we go.
More than half of us haven’t written a will, even though this means we could leave a terrible mess behind when we die. Many assume that if we die without a will our estate will still make its way to the right people, but this is not true. When there is no will your assets are split according to the rules of intestacy.
This means that , in England and Wales, if you are married, or in a civil partnership, and die without a will, your spouse inherits your personal possessions plus the first £270,000 of your estate. The remainder is split between your spouse and surviving children or direct descendants. If you have no direct descendants, your spouse inherits everything
There is no such thing as a common-law partner under UK law so even if you have lived together for decades, if you aren’t married (or in a civil partnership) and you die without a will they will get nothing.
Where your money goes
If you are unmarried your estate will pass to your children, parents, siblings, distant family... or even Prince Charles. Prince Charles ends up getting plenty of money as a result of our general failure to write a will. If you die without one and have no family your estate goes to the crown, unless you live in Cornwall where the Duchy of Cornwall – Prince Charles – gets your assets. This has resulted in Prince Charles receiving over £1m, which he has handed on to charity.
“The only way to ensure that your money goes instead to the people you want to receive it is to make a will,” says Mark Atherton in The Times. You can stipulate not only who gets what from your financial assets, but it also provides you with the opportunity to distribute your treasured possessions to the people who you think will most appreciate them.
In order to ensure you get a legally binding will that reflects your exact wishes you should see a solicitor. You will typically pay around £144-£240, according to the Money Advice Service. If you and your partner both need a will you can keep your costs down by getting mirror wills. This is where both wills are exactly the same leaving everything to each other or your children and you just reverse your names on them.
Alternatively, March and October are Free Wills Months. In these months anyone aged 55 or over can get a will written or updated by a solicitor for free. You are encouraged to make a donation to charity in your will in return for getting free legal advice. If you are worried about inheritance tax, note that if you give at least 10% of your estate to charity you’ll reduce your inheritance tax charge from 40% to 36%.
Review it at regular intervals
Once you have a will, don’t rest on your laurels. Review it at “key stages in your life”, says Lucy Warwick-Ching in the Financial Times: births, marriages, deaths or the end of a relationship. Bear in mind that when you divorce your ex-spouse is automatically removed from your will, but if you only separate, they could still benefit even if you die years later.
When writing your will be aware that anyone will be able to read it after you die. All wills become public documents that can be found via the Gov.uk website.
“You may therefore not want to write anything in your will that you wouldn’t be comfortable with people seeing after your death,” Julia Schtulman, associate at Withers law firm, told the Financial Times.
“If you want to keep certain things confidential then the best course is to write a letter of wishes to go alongside your will. Although this will be kept private from public view it is not legally binding – it is only an expression of your wishes.”
Finally, make sure your loved ones know where to find your will. If you get it drawn up by a solicitor, they will usually hold on to a copy so make sure your executors know which solicitor to contact in the event of your death.