Why do people avoid making a Will

There are two major reasons why people avoid making a Will:

• They put it off because thinking about death is difficult and complicated, or
• They avoid it because they are worried about the costs involved

In both cases, the risk is that they will die, intestate, without having made a valid will.

What is Probate?

Probate is a legal and financial process for dealing with a deceased person’s estate.

It is the means of ensuring that an estate is properly dealt with and shared out among named beneficiaries in a will.

After a person dies, someone will then apply for a grant of representation, to begin the probate process. Normally this person is an executor named in the deceased’s will.

Who Doesn’t Have a Will?

A large number of people do not have a will. This is around 60% of adults the UK.

This means over 30 million people risk dying intestate.

According to research, people over 55 are three times more likely to have a will than those aged between 35 and 54.

This is in spite of the fact that they have dependents and assets.

What reasons do people give for not making a will?

• The majority say they will do it later in life, putting off any plans for their estate
• Others are put off by the perceived cost of will writing.

There is also a common misconception that when you die, friends and family will be able to sort your assets and possessions, without the need for a legal will.

But this is not what happens if you die without a will.

Instead, the state decides what happens to your wealth, property and assets, under the rules of intestacy.

What Do the Rules of Intestacy Say?

Applying to England and Wales, the rules of intestacy are very rigid and inflexible.

Given that many modern family situations are complex, involving re-marriages, different partners, and different children by different partners, intestacy can therefore be problematic.

Under the rules of intestacy these are the people who benefit the most from the deceased person’s estate, in this order:

• Spouse or civil partner
• Children or grandchildren
• Parents
• Brothers and sisters
• Grandparents
• Aunts and uncles

It continues to work its way down a hierarchy of living relatives. If there are no living relatives to pass the estate on to, then it goes to the Crown in its entirety.

The danger of dying intestate is that if decisions about your loved ones are left to the state to decide, some of your loved ones cannot inherit at all.

For example, the rules of intestacy do not recognise cohabiting partners.

Even if you have lived with someone for many years, if this is not in a marriage or a civil partnership, then it has no legal recognition as cohabitation.

Therefore, if one person dies without leaving a will, their partner would not automatically be entitled to inherit anything from their estate.

Many people who cohabit assume that they would inherit from their partner as a matter of course, but this is not the case if they do not name them as a beneficiary in a will.

The rules of intestacy also do not recognise step-children as automatic beneficiaries where there is no will.

The rules only recognise biological or legally adopted children.

When is the Best Time to Make a Will?

We’ve already seen that making a will is mostly a concern for people over the age of 55, but should you wait until you are older to make a will?

The key thing here is that whether or not to make a will should not be something that is simply determined by how old you are.

Instead, you should consider what kind of assets and possessions you have, your wealth, and whether you have dependents or loved ones who require protecting in the future.

There are various changes many of us experience in life, which should act as triggers for making a will:

• Buying or investing in a property – owning a home, or becoming a property investor, will give you substantial assets, increasing the value of your estate for any beneficiaries you have.
• Marriage or civil partnership – if you already have a will when you get married, then this automatically revokes it, unless it states otherwise, which means you then need to make a new one.  If you don’t have a will, then this is a good time to make one to ensure your partner is the beneficiary of your estate.
• Divorce – this will not revoke your will automatically, but it is likely you will want to change who benefits from your estate.
• Having children – now you have more dependents who you will want to provide for, and you may also need to consider whether they will need legal guardians named in will and what age you want them to become beneficially entitled and who should manage that money until they are old enough to do so themselves.
• Bearing these kinds of changes in mind, your will is not primarily about your age, but at what stage in life you’re at, and how this might impact on loved ones, should you die.
• Wills are a form of protection, for your wealth, your property, your possessions and, most of all, for your loved ones.

What About the Cost?

Wills vary in complexity, depending on the property and other assets of the people making them.

However, the more complex your assets or family structure, the more worthwhile it is for you to invest in a properly thought-out and written will.

Probate is a necessary legal process in most estates where there are assets above £50,000, the process is there to ensure that your financial institutions are dealing with the right people. Probate can a lengthy, and costly process, but it ensures that your wishes for your estate are clearly followed and met.

Trusts are a flexible means of protecting your assets and wealth for your family in the future, but they do mean that you lose control and ownership of your asset during your lifetime.

Essentially, by creating a lifetime trust, you can ensure that your estate is shared out as you want it, quickly and efficiently. The trust will make sure your assets pass to your heirs privately.

By doing this, you can avoid having to apply for a grant of probate, and the administrative costs that go with it.  Although you will have the administrative costs of the trust.

Whereas a will only distributes your property and assets after you die, a living trust places them in trust, managed by a trustee for the benefit of your beneficiaries.

Because the trust has, in effect, already distributed your assets and property while you are alive, there may not be a need for probate.

Having a lifetime trust however may not avoid the need to submit an inheritance tax account to HMRC which is where the bulk of probate costs are incurred. Having an interest in a trust or setting up a trust and not surviving that for 7 years means the assets still form part of your estate for inheritance tax purposes

Making the Right Decision

People’s personal circumstances are different.

Some of us have more complex family networks and relationships than others.

Assets can vary in their distribution and complexity. Some people have financial investments, or more than one property.

Some have specific possessions they wish to go to named beneficiaries when they die.

The important thing here is not only to make the right decision for you, but to make a decision in the first place.

If you’re avoiding your future planning because you’re putting it off, or it seems too costly, you risk not having any clear, legally binding arrangements in place at all.

Talk to a specialist about your options, and take the necessary steps to protect your wealth, your assets, your property and your loved ones.

For more information about wills, probate and trusts, please call 08000 088 6004, or fill in our online contact form, and we will be in touch as soon as possible.