Half of people over 40 are putting their estate at risk by not planning ahead
16th December 2022
Recent reports suggest that half of those over forty have yet to write a Will and are putting their estate at risk in the event of their death.
The news comes from a survey commissioned by Solicitors for The Elderly and carried out by Censuswide.
Not only does this mean that an estate may not be inherited by the deceased desired beneficiaries, but it could also lead to hefty inheritance tax bills, leaving loved ones to foot the bill at an already upsetting time.
One of the most common misconceptions is that spouses are automatically entitled to the whole estate in the event of death irrespective of whether a Will is place. However, this is not the case. In the absence of a Will, control can be lost over what happens to the deceased’s estate and special rules, known as the Intestacy Rules, will apply as to how and who benefits from the deceased’s assets.
This could result in any property, assets, savings and investments not going to the beneficiaries the deceased had wished them to, causing distress and disappointment to those left behind, and even leading to family fall out and litigation
When Intestacy Rules Take Effect
If the deceased leaves a surviving spouse and children, the Intestacy Rules state that the spouse is entitled to the first slice of the deceased’s assets owned in their sole name, known as the ‘Statutory Legacy’ which amounts to £270,000. Anything over and above this is then split 50% to the surviving spouse and 50% to the children equally.
The Intestacy Rules vary depending on which relatives survive. It is also worth mentioning that if a death without a Will occurs leaving an unmarried partner, that partner is not automatically entitled to anything from the deceased’s estate, other than assets owned in joint names.
“These survey results certainly make disturbing reading,” comments Katie. “The fact that so many people would risk their estates, savings and investments by not making a
wWill is deeply concerning. Not only are they risking their final wishes not being taken into consideration, they are risking their estate going to their next of kin rather than to whom they wish to bequeath it to, which in the case of, for example, an estranged partner or second marriage, can cause huge distress to family and loved ones.”
Many are unaware of the Intestacy Rules and what happens to assets in the event of death. Should a person want the assurance that assets will pass in accordance with their wishes, a legally binding Will setting out who should inherit from the estate must be made prior to death.
When initially writing a Will, it is important to consider protecting your partner. More and more often couples are taking the decision to cohabit rather than marry according to the Office for National Statistics. However, the law has largely yet to recognise cohabiting couples, meaning in the event of a death the remaining partner can be left unprotected.
For unmarried couples who jointly own a property, if one partner dies intestate then the other partner can keep the home. However, they could find that assets in the deceased’s sole name are inherited by their late partner’s parents or siblings.
It is also important to take into account any and all dependants including who would care for any children under the age of 18, and also who would take ownership and responsibility for any pets.
Being able to produce a Will not only reduces the emotional toll a death can cause family members but can also assist financially. Leaving property to children or grandchildren can reduce inheritance tax, along with anything bequeathed to a spouse or civil partner being completely exempt from death duties, resulting in far less of an estate being whittled down by taxes and fees.
Where to start
The process of starting a Will may seem daunting, (which may be why over half of over 40’s have not made one) however it is quite simple. First of all, a general identification and broad valuation of the estate is required including property, savings, and any other assets minus any debt value.
When deciding to write a Will it is important to get specialist legal advice to ensure a full understanding of your family dynamics and financial circumstances.
Will writers are not regulated and so it is important to use a fully qualified professional at a law firm which is regulated. Anyone can start a will-writing business and unregulated parties can put your life savings at risk. Contact our experienced Private Client solicitors for further advice.