Do I need to make a Will?

With the number of contested wills cases increasing, people often ask us if it’s really necessary to make a will. Lawyer Terese Kingman investigates.

I specialise in drafting wills so I guess you could say I have a vested interest in advising people to make a will. However I can assure you that the advantages to be gained by making a will still significantly outweigh the disadvantages – even if the number of contested will claims is on the increase.

It always surprises me just how many people don’t have a will. And when I speak to clients about making a will very few of them are fully aware of just how important it is to have one.

I generally advise that as soon as someone buys a house or a couple starts a family then they should consider making a will.  Not only must you think about where you want your possessions to go when you die but also who is going to look after your children in the event that you predecease them whilst they are under the age of 18.  I also ask clients to keep their wills under review as circumstances can change. For example you may get married or have children or grandchildren, get divorced, receive a large inheritance or even win the lottery. 

Marriage revokes any will in place, unless you have made your will in contemplation of a future marriage to a named person. If you get divorced it will invalidate any gift you may have made to your spouse, so it will be treated as if they had died before you.

Essentially, having a will in place gives you peace of mind and usually ensures that your property and possessions go to those you want them to go to, such family and loved ones, rather than being shared out in accordance with the statutory intestacy rules laid down by the Government. The intestacy rules could mean that those you had intended to receive a larger share of your estate may receive little or nothing, whilst others may benefit who you may not have wished to inherit.

There is a big misconception that if you are married you do not need a will since everything will automatically pass to your surviving spouse.  WRONG.  If you die without a will then you die intestate and the intestacy rules are very strict. For example, as the rules currently stand (June 2012) if your whole estate is worth less than the statutory legacy of £250,000 only then will your spouse receive the whole of your estate.  However, if your estate is worth more than this sum and you have children then your spouse will only inherit £250,000 together with a statutory life interest in half of the remaining assets (this means they will have the benefit and receive the income of these assets during their lifetime and then on their death these assets will pass to your children). The other half of the residue will be shared amongst your children or grandchildren immediately, unless they are under 18 years of age in which case their respective shares will be held in trust until they reach the legal inheritance age of 18.  Had you made a will then you could decide what your spouse receives or at what age your children or grandchildren inherit.  Some people tend to consider 18 years is too young to inherit a substantial sum of money so choose to leave it in trust until the children are, say, 21 or 25. It is your choice.

Your estate is likely to include the family home and another important factor to consider is whether this is held by you and your spouse as joint tenants or tenants in common.  Under the survivorship rules if you and your spouse hold property as joint tenants then the property on your death will automatically pass to your spouse.  This will then fall outside of the statutory legacy.  Therefore if your estate includes the jointly owned family home and investments of £250,000 then your spouse will receive the house as well as the £250,000 investments..

It is usual for a married couple to own their home as joint tenants.  However, some couples choose to own as tenants in common.  What this means is that you each own a definable share of the property and on your death (assuming you die first) your share will not automatically pass to the survivor but will pass in accordance with your will or the intestacy rules. 

So when you buy a house it’s vitally important that you discuss these two options with each other (and your solicitor) very carefully.

If you die intestate without having had any children and your estate is worth more than £450,000 then your spouse will receive a statutory legacy of £450,000 and a one-half share of the residue of your estate immediately. The remaining half share of the residue will be distributed amongst your parents and failing that to your brothers and sisters or nephews and nieces.  Plainly, this is not ideal for a spouse who has helped build up the family assets over the years and then finds that because their wife or husband hasn’t made a will part of the estate goes to their parents or siblings!

Basically ensuring you have a valid will in place will help to ease the already difficult and stressful time for those left behind.  It really is my advice that every adult should plan ahead and have a will in place.  Making a will is a fairly straightforward procedure and really shouldn’t be off putting.  If you came to see me I would be asking you :

  1. who you would like to be your executors and trustees?  These are the people who will deal with your affairs on your death such as paying all debts including funeral expenses, administration costs, inheritance tax, collect in all assets, deal with investing assets in the event there are beneficiaries under the age of 18 which means their inheritance must be held in trust. It is my advice that you have two executors in the event that one of them is unable or unwilling to take up the appointment on your death.
  2. If you have children under the age of 18, who would you wish to appoint as guardians if neither parent is alive.
  3. Whether you have any specific gifts you would like to leave to anyone?
  4. Who you want to inherit the whole or the remainder of your estate?

Another important point to note is that the present inheritance tax nil rate band is £325,000. This means that if your estate falls within this figure it will be tax free, but anything above this figure will be liable to inheritance tax at 40%.  However, there is no tax to pay on property passing between spouses. Furthermore, it is likely that on the death of the first spouse their assets will pass to the surviving spouse, which means that on the death of the survivor not only will that spouse have their own inheritance tax nil rate limit of £325,000 but also the unused nil rate band of the deceased spouse.  It is irrelevant whether the first spouse to die had any assets or not at the time of death, so a family will only have to pay inheritance tax on anything over and above the figure of £650,000.

I said earlier that a will usually ensures that your property and possessions go to those you want them to go to. As my colleagues who specialise in contested wills will confirm, the mere fact that you have made a will does not guarantee that the terms of the will shall be carried out. Although the law places great emphasis on the principle of testamentary freedom, the law will step in to prevent a perceived injustice where children, partners/spouses and dependants are involved.

The Inheritance Act allows a judge to override the provisions of a will (or even the intestacy rules) and to distribute the estate differently. Claims under the Inheritance Act are on the increase (as our inheritance disputes and contested wills department will verify), but I wouldn’t regard this as a reason not to make a will.

It is part of the will draughtsman’s duty to consider whether an Inheritance Act claim is likely to be made and advise on what steps can be taken to pre-empt  a contested will claim so as to avoid costly litigation in the future. A well drafted will can avoid a great deal of family disharmony, not to mention thousands of pounds in legal costs that can be incurred when contesting a will.

Equally, poorly drafted wills can lead to protracted and expensive will disputes arising and my colleagues in our professional negligence department are experienced in handling negligent will claims. However, I would again suggest that this shouldn’t put you off. The benefits of making a will far outweigh the potential downside and I would urge everyone who hasn’t already done so to see a solicitor and make a will as soon as they can.