Is your Will up to date?

A Will is one of the most important documents you can have.

A Will is a legal document that enables you to decide how your Estate – your property, assets, money and any personal belongings – will be distributed after you die. It can have tax advantages, too, and moreover guarantees that your specific wishes and legacies will be carried out by your appointed representatives (known as ‘Executors’) in strict accordance with your stated wishes and instructions.

If you know you need full-time care and you don’t have a Will, we strongly recommend that you make one now.

Does your Will reflect your specific wishes?

If you already have a Will, make sure it’s up-to-date and that it says what you want it to say. Relationships and wealth can change over time, and what seemed right when you last made your Will may now need amending and updating.

For example, after you die, you may wish to:

benefit new members of the family eg children and grandchildren
include your favourite charities to ensure that the needy benefit, too
change (or add more) Executors to administer your Estate
add a Codicil to your Will – for example, to make provision for specific gifts of jewellery, shares or money to friends or family
nominate someone to act as a guardian for your children (if you die while your children are minors)
record your funeral wishes in your Will
provide for your pet(s)
give practical instruction and guidance for those loved ones left behind

Making a Will gives you control of your affairs and can provide for how your wealth and assets are to be distributed after death.

Mental capacity

To make changes to any Will, mental capacity is key. If your mental ability is impaired and you are no longer able to make decisions for yourself – and therefore no longer able to understand the implications of those decisions – you won’t be able to change your Will.

That’s why it’s vital to act now.

The transition between being able to make decisions or not is often swift, so it’s best to get your affairs in order right away.

Tax

It’s also advisable to check that you own your property and assets in a tax-efficient way. Take legal and financial advice on this, especially if you’re married or in a civil partnership.

The nil rate inheritance tax band for the first person to die can often be transferred to the other person – effectively doubling the inheritance tax threshold on the second person’s death. Always take advice!

Who inherits if I don’t have a Will?

In the absence of a (valid) Will, the Intestacy Rules apply, and your acquired personal belongings and assets will be distributed in a specific pecking order depending on those who survive you. The Intestacy Rules could, therefore, perhaps unwittingly benefit some family members whom you had not intended to benefit from your Estate to the detriment of others.

When there is no Will, your family will have to apply to the Court for a Grant of Probate in order to deal with your affairs. This can be time- consuming and cause delays whilst key decisions may be required.

Important: A surviving partner who wasn’t married or in a civil partnership with the deceased, has no automatic right to inherit.

Under the Intestacy Rules, the order of distribution of your Estate is as follows:

Where there is a spouse or civil partner:

Where a deceased dies leaving a spouse but no surviving children then the residuary estate is paid to their spouse absolutely.

If, however, the deceased dies leaving a spouse and surviving children then their residuary estate is divided as follows:

– The surviving spouse will keep all the assets (including property), up to £270,000.00 (known as a ‘Statutory Legacy’) and all the personal possessions, whatever their value.

– The surviving spouse will also receive an absolute interest in half of the remainder of the residuary estate; and

– The other half is then divided equally between the surviving children (children include legally-adopted sons or daughters, but not stepchildren). If a son or daughter (or other child where the deceased had a parental role) has already died, their children will inherit in their place.

Where there is no spouse or civil partner:

If there is no spouse, then the Estate is shared equally between the children (children include legally-adopted sons or daughters, but not stepchildren). If a son or daughter has already died, their children (the grandchildren of the deceased) inherit in their place.
If there are no children, then the Estate is shared equally between the parents.
If there are no parents, the Estate is shared equally between the brothers or sisters.
If a brother or sister has already died, their children (nieces and nephews of the deceased) inherit in their place.
If there are no brothers and sisters, the Estate is shared equally between the half-brothers or half-sisters. If a half-brother or half-sister has already died, their children (nieces and nephews of the deceased) inherit in their place.
If there are no half brothers and sisters, the Estate is shared equally between the grandparent(s).
If there are no grandparents, the Estate is shared equally between the aunts or uncles. If an aunt or uncle has already died, their children (the cousins of the deceased) inherit in their place.
If there are no aunts and uncles, the Estate is shared equally between the half-aunts or half-uncles. If an aunt or uncle has already died, their children (the cousins of the deceased) inherit in their place.
If there are no half aunts and uncles, ownership of the whole Estate goes to the Crown.

For more information about the distribution of the Estate under the Intestacy Rules, visit the Government website: https://www.gov.uk/inherits-someone-dies-without-will

Take action now

Do it now, while you still can. It won’t make any difference to your life while you’re still alive, but it will make things much easier for those you leave behind and who will be grieving.

Asset Protection Trust

There are other ways that you can protect your assets, during your lifetime, too. In certain circumstances you can set up an Asset Protection Trust to ensure that your home and wealth are not taken into account by the Local Authority when assessing any means-tested financial contribution to your care fees. Such Trusts are perfectly legitimate and can be tailored to your specific circumstances and can include outright gifts to family members to ensure that they can enjoy the benefit during your lifetime rather than under your Will. By doing so, it also avoids family disputes, and you can gift your home, assets, jewellery, shares and so on, to family members you entrust and wish to see benefit whilst you are alive.

However, this is a complex area where we recommend you seek specific legal advice. Asset Protection Trusts can often be challenged by Local Authorities if they are seen as a deliberate deprivation of capital – ie seeking to put your assets out of reach in order to reduce your wealth and ‘beat’ the means-testing system. But setting up such a Trust far enough in advance can have significant (inheritance tax) benefits to the donor and, of course, benefit the recipient, too, whilst you are alive and derive pleasure from your gift.

I have a Lasting Power of Attorney so why do I need a Will?

Many people confuse a Lasting Power of Attorney (LPA) with a Will – or assume that because they have a Will, they automatically have some kind of power of attorney. Wrong!

An LPA is very different from a Will. In essence, by setting up a Lasting Power of Attorney, you give someone you trust the authority to make decisions and to act on your behalf and in your best interests. It protects your own interests while you’re still alive. Whereas a Will protects your beneficiaries’ interests after you’ve died.

A Lasting Power of Attorney is only effective while you’re still alive – up to the point where you die. The moment you die, the LPA ceases and your Will becomes relevant instead. There’s no overlap.

Read our blog: Self-defence – Protect yourself and make a Lasting Power of Attorney

5 Reasons why should you make a Will?

1. You keep control and can choose who will benefit from your Estate and inherit what they are entitled to in accordance with your pre-desired allocation.
2. You decide who will administer your affairs after your death and give them guidance and specific instructions as to your wishes.
3. You avoid the Intestacy Rules, which automatically determine who will benefit from your estate; avoids unnecessary family (or business-related) disputes and expensive legal challenges.
4. It is far more expedient to administer an Estate where there is a Will in place and decisions can be made more quickly.
5. It gives you certainty that your beneficiaries will inherit as intended and avoid any unintended consequences (eg a long-term unmarried partner missing out).

If you need help seek specialist legal advice – visit our one-to-one page