Whilst it is a subject that is often shied away from and not discussed in families given the nature of my practice, I often ask family and friends whether they’ve made a will. All too often the reply I receive is “I don’t need a will”. This may true in some cases but not in the majority of cases. It is a common misunderstanding that only the rich need a will but this is simply not the case. Whilst in many cases the primary reason for making a will is to deal with the distribution of any assets of monetary values, this is not the sole reason.
When considering whether or not to make a will you should not view your estate as only comprising of assets of monetary value. It may be that you do not have any or any significant assets of value but there are many other wishes that can be incorporated into your will, all of which go to ensure that your estate passes to those who you want it to go to. Sadly, I often have families and friends telling me that a deceased’s estate is not being distributed in accordance with their wishes. This is particularly upsetting for loved ones left behind but in most cases this could be avoided if the deceased had executed a will or updated an existing will – it is important to remember that a will is a living document and if your personal circumstances change so should your will. In this article, I set out some examples of matters which can be included in your will.
By making a will you can nominate a person or persons (normally two but it can be more) to be executors and trustees of your estate. Whoever you nominate (provided they are willing to accept the position) will be responsible for administering your estate in accordance with your wishes as set out in your will. The executors’ main duties will be to collect in any assets and dispose of them in accordance with your wishes. However, their duties also extend to ensuring that any other wishes as set out by you in your will are met, in so far as they are able to do so. These additional duties could range from guardianship arrangements for your children (if they are minors) or indeed, your pets through to making arrangements for your funeral and disposal of your body. Ultimately, it is for your executors/trustees to carry out your wishes as set out in your will after your death.
Subject to the provisions of the Inheritance (Provision for Family and Dependants) Act 1974 (“the Inheritance Act”) which allows certain categories of applicants to apply to court to seek financial relief from a deceased’s estate if their will does not provide reasonable financial provision for them, by making a will you are ensuring that your assets pass upon your death in accordance with your wishes, whether that be transferring assets to a particular family member(s) or friend(s) or selling your assets and donating monies to a specified nominated charity that perhaps has some sentimental meaning for you. If you do not have a will, then your estate will pass in accordance with the intestacy rules which may mean that someone who you would prefer did not inherit any of your assets in fact does so. Indeed, in extreme circumstances where no living relatives can be located, your estate will pass to the Crown! Dying intestate also makes administration of your estate more difficult for loved ones left behind and at a time when they are also grieving.
Many of us have items of jewellery or other personal possessions which may not be particularly valuable but are of significant sentimental value to us. Perhaps you inherited a particular piece of jewellery from one of your parents and would like to pass it to one of your children upon your death or you just have a favourite piece of jewellery that you would like to gift to a family member or close friend. These are specific legacies which can mean that your executors will be able to take steps to ensure that these are passed in accordance with your wishes.
Another area which is finding increasingly favour at the moment is the question of digital assets. In some cases these can comprise of very expensive bitcoins or other form of digital currency but in many cases the value will be sentimental rather than monetary. One particularly sad example of the problems that can exist with digital assets occurred in a recent case against Apple. Rachael Thompson’s husband, Matthew tragically took his own life in 2015. They had been married for 10 years and had one daughter, Matilda, aged 10. As is often the case now, Rachael and Matthew did not have photographs of their lives together in hard copy format. Instead, they stored it on their phones and other digital devices. In Matthew’s case he had some 4,500 images and 900 videos stored on his Apple Iphone. As well as photographs of the family, these images also included photographs of his father who was also deceased. Rachael wanted to be able to keep alive memories of Matthew and father-in-law for Matilda and so asked Apple to afford her access to her late husband’s account for the purposes of retrieving the images and videos. Matthew had not specified what access others should be allowed to his account in the event of his death and so Apple refused her request. As a result, Rachael was compelled to bring court proceedings against Apple. Eventually, some three and a half years later the court finally made an order in Rachael’s favour allowing her access to her late husband’s account but if Matthew had just granted permission in his will for her to have access to his account upon his death, she could have avoided the very lengthy, expensive and distressing court proceedings.
Whilst no-one likes to think that they will die leaving minor children, this can happen. Have your thought what would happen to your children if the worst were to happen? Is there a particular person or persons who you would trust with your child’s care if you were to die early or perhaps, on the converse is there someone who you think would take control but would the last person you would entrust your child’s future to? A will allows you to appoint guardians for your child to ensure their well-being after your death. It would also allow you to set up trust arrangements for any minor child thereby ensuring both financial security and care arrangements for your child.
Inheritance tax has not seen any major increases recently, remaining at 40% for some years. However, many believe that following the economic crisis as a result of the current COVID-19 pandemic that an overhaul is yet to come. Whatever happens in the future, the current rate of 40% (payable on the value of estates above an individual’s tax threshold) can sometimes result in a sizeable liability. It is therefore important to look at ways to reduce this liability and having a will and receiving tax advice from a specialist will drafter may result in substantial tax savings ensuring that as much of your estate as possible is preserved for distribution to your loved ones.
What about your funeral? Do you have a specific request regarding your funeral? Perhaps you have a particular song that you would like played as your coffin is carried into the church or maybe you feel strongly that you do not want a religious service at all. There may be conflicting religious views within your immediate family which could give rise to issues following your death. You may have a special place where you would wish your body to be buried or your ashes to be scattered. Any issues in relation to your funeral can be included in your will. It would then be the responsibility of your executors to carry out your wishes.
As indicated above, if you chose not to make a will or to make a will but then not update the same, it could be that upon your death your assets would pass to someone who you most definitely did not want to inherit them or in the event that no relatives could be traced to the Crown. In a recent case, an elderly gentleman from Cambridge died leaving an estate worth about £600,000.00. He had not made a will and was believed not to have any known relatives. However, following the instruction of a genealogy firm, he was found to have numerous cousins who will now all take an equal share in his estate. Whilst it was undoubtedly of value that the genealogy firm were able to trace relatives in this case, the value of the estate will have been reduced as a result of their instruction and it will always remain unknown as to whether the deceased would have wanted any of these relatives to inherit his estate. By making a will he could not only have preserved the value of his estate but also ensured that this passed to those who he wanted to have it.
Ultimately, your will is your chance to set out your wishes as regards the distribution of your financial assets following your death and any personal arrangements that you may wish to include. Doing so will, as indicated above, allow your executors/trustees to carry out the administration of your estate in accordance with those wishes. Whilst it cannot be said that having a will always ensures there will be no disputes between family and friends following your death, having a will does afford some assistance to the court when considering such disputes as to what you wanted to happen to your estate. There are some instances (for example, claims under the Inheritance Act) where the law is such that a testator’s wishes are just one of the factors to be considered by the court but if you do not make a will at all, the court does not even know what your wishes are.
Making a will is often something that people put off doing but as the recent tragic events of the global COVID-19 pandemic has demonstrated this can come at a cost.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.
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If you or your family has been affected by any of the issues highlighted in this article then please do not hesitate to get in touch with Ally Tow on [email protected] If you need assistance in connection with the preparation of a will, please contact a member or our wealth protection team on 0118 952 7227.
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