Did you know that nearly two-thirds of adults do not have a Will? One of the reasons cited for this astonishing figure is that many people do not feel they are wealthy enough to justify having one. However, the overall average house price in Cornwall is £253,331.00, which is a significant sum, and this is up 10% from house prices in 2007.
Should you fail to formalise your wishes regarding the division of your assets on death, your estate will be distributed in accordance with the rules of intestacy. These rules are decided by the government and as such may not be in line with your own wishes. People you may have wanted to benefit from your estate may be left out or alternatively someone you may not have wanted to benefit may be entitled to a share of your estate. Furthermore this can cause unnecessary stress and uncertainty for the loved ones who are left behind.
In my view, if society as a whole was more aware of this, perhaps the number of people dying without Wills would be a lot less?
What happens to my estate if I die without a Will?
If you die without a Will in England and Wales, your estate will be distributed in accordance with the Rules of Intestacy. The distribution of an individual’s estate is then determined by their personal circumstances at the time of their death. I have set out the most common scenarios below: –
Married without children
The surviving spouse will receive the entire estate.
Married with children
The surviving spouse will receive: –
- All personal chattels.
- The first £250,000.
- Anything over £250,000 is divided as follows: –
- Half to the surviving spouse.
- Half equally between the surviving children.
In this situation there is a pre-determined “pecking order” which stipulates how the estate will be divided. Essentially the estate will be divided equally between the highest ranking “Class of Beneficiaries” in existence. These are (from highest to lowest) as follows:-
- Brothers and sisters/ children of brothers and sisters.
- Half brothers and sisters/ children of half brothers and sisters.
- Uncles and aunts/ children of uncles and aunts.
- Half uncles and aunts/ or children of half uncles and aunts.
- The Crown.
The potential problems and unfairness of the Rules of Intestacy
One of the main issues associated with dying without a Will is that an unmarried cohabiting partner has a limited entitlement to the estate.
Let’s imagine that a couple have been living together for 25 years and own a home. Unless the home is held as joint tenants, (which means that it automatically passes to the surviving owner) the deceased’s share in the house will pass in accordance with the rules set out above. The situation may be the same for any cash assets, again dependant on whether they are in joint or sole names. This could result in the survivor being forced to sell the home in order to pay the “rightful” beneficiaries their share of the estate if they do not have any other readily available funds. This could be avoided if a Will leaving the estate (or even just the share in the property) to the surviving owner existed.
It may be possible for a person who would not normally benefit under the rules of Intestacy to make a claim against the estate in accordance with the Inheritance (Provision for Family and Dependants) Act 1975. This claim is made on the basis that the deceased failed to make reasonable financial provision for the disappointed beneficiary. Such claims take into account a number of factors including: –
- The size of the estate.
- The disappointed beneficiaries future needs and resources.
- The financial status of the beneficiaries who inherit under Intestacy.
Such claims are inherently time consuming, stressful and expensive. In my view these should be avoided if at all possible.
The dangers of DIY Wills
There are many DIY Will options available online or from various other providers; some costing as little as £10. However, while an “off-the-shelf” Will may seem a cheap option to avoiding dying intestate, if they are not witnessed and signed correctly, they may be deemed invalid.
This however is not the main danger of relying on an “off-the-shelf” product to determine who benefits from your estate when you die. In my view the main disadvantage of creating a Will yourself is that “you don’t know what you don’t know.” Let me explain what I mean by this.
An experienced Solicitor will spend a considerable amount of time asking questions about your property, family and wishes prior to putting their fingers to the keyboard and drafting your Will. There are a plethora of “pitfalls” which could result in your estate being distributed in a manner which is contrary to the contents of your Will. A Solicitor is trained to discuss your circumstances in detail and to draw out any issues that even you may not be aware of. They can then advise you accordingly on how best to structure your Will in order to achieve your objectives.
The contents of your Will may sometimes be controversial. A Solicitor is trained to recognise this and can bring it to your attention. They can also advise you as to the necessary steps that can be taken to withstand any claim against your estate after your death. Although a claim cannot be prevented, a Will prepared by a Solicitor puts your estate in a position where it stands the best possible chance of being upheld. This has been a topic of much debate in the Courts over recent years and may be the deciding factor in avoiding costly and stressful Court proceedings.
Should you instruct a Solicitor to draft your Will?
In my view, absolutely.
By investing a little extra in getting professional legal advice when drafting your Will, not only will you potentially save your loved ones time, cost and unnecessary stress. A Solicitor will also do their utmost to ensure your Will reflects your wishes whilst advising you on any potential/ unknown pitfalls there may be.
Furthermore, a Solicitor can also help you understand how to mitigate any Inheritance Tax liability your estate may be liable for. There has been a substantial change in the Inheritance Tax laws in the last year and many Wills are now not as “Inheritance Tax efficient” as they could be. Solicitors are required to keep up to date with this ever moving landscape. You may not have access to the same level of expertise if you choose to prepare your Wills through an unregulated Will writing service or if you prepare your own Will.
Obtaining skilled legal advice does not take a great deal of time and generally costs less than you imagine. It can also potentially save you (or more importantly your loved ones) substantial sums in the long run.
But, most of all, you get peace of mind.
Chris Gilbert is an Associate Solicitor in Nalders “Later Life Team”, if you wish to discuss any of the issues raised above or to make an appointment to review your Will(s) please phone our Truro Office on 01872 241414 to make an appointment.