Many people think that because they don’t own a lot of property they don’t need a Will because people presume that if there isn’t a lot to pass to others that when they die then it’s not that hard to sort out. But it is not as simple as that. Most people don’t realise the landmine field that can apply when they die intestate.
And why should they? It’s not something that people think about all that much, and don’t tend to think about until they get a bit older anyway, but these are just some of the reasons why you should make a will. I have left out some of the more complicated ones that don’t apply so much, such as Inheritance Tax, complicated trust property and larger business issues, and set out the most common reasons that people should have a will.
You should also make a will for the simple reason that if Executors are appointed the process is made so much easier for your family. Assests can be dealt with simply and not be subject to freezing by the Courts, and with a lot less red tape.
You should have a Will if any of the following apply:
If you have children: In order to choose who will look after them and ensure there are funds in place to keep them. Children under the age of 18 cannot inherit money or property so anything they inherit (if anything, without a Will intestacy applies, and depending on the size of your estate your children may not benefit at all.) It is also important to specify Guardianship, who will look after the children, especially if you are no longer in a relationship with the children’s other parent.
Unmarried couples: Whilst there are plans to change this, currently the law doesn’t really recognise un-married, or un-civil partnered, couples as having legal rights over the other’s property, even if you have been together for a significant amount of time. Joint property will pass to the other party, but even then there can be problems.
Another major problem is that if one party dies intestate their assets can be frozen. These funds can be frozen for years whilst the estate is administered which can lead to huge financial problems for the surviving party (e.g. if the deceased was contributing to or paying the mortgage from an account held in their name only). Even joint accounts can be frozen when the estate is in administration.
If the house was in the sole name of the deceased the surviving partner will receive no interest in it unless they can prove legal rights that have established over time (by way of a “resulting trust” or a “constructive trust”).
I cannot stress enough how important it is for unmarried couples to make a will as most people do not realise that a long term partner does not automatically benefit from their partner’s Will.
If you are divorced: Your previous Will will still remain valid, but any reference to your former spouse will be omitted (and treated as if they died on the date of the marriage dissolution). However, there are still some cases where gifts to others are dependent on the gift to the spouse (e.g. a gift to be held on trust by the spouse for an infant) which may or may not remain valid dependent on the way the rest of the Will is drafted.
So if you are divorced it is essential to renew your Will to ensure that gifts to anyone who is not your former spouse still stand.
Pets: Whilst it is not possible to leave money to a pet itself it is possible to leave money in trust to ensure that a beloved animal is cared for. In most cases people can be sure their family will look after animals, but for extra peace of mind it is possible to make provision for your pets.
Friends: If you have friends you wish to inherit anything you have to specify them. You may have told them your whole life “when I die you can have my x, y and z” but that is not legally binding.
Specific funeral plans: If you know what you want your funeral to be like, you can detail it so that your family doesn’t have to make the decisions.
If you own property: ‘Joint tenant’ mortgages automatically pass to the other owner (but note that assets can be frozen and transfer of ownership can be very complicated)
If you’ve a ‘Tenants in common’ mortgage it’s important to say what happens to your share of the house. If you die intestate and you are not married to your co-habitee there can be all sorts of problems if the deceased’s family want to take possession of the deceased’s share ~ which could mean applications to the Court for sale if the surviving partner cannot afford to buy them out.
If you own a property overseas, inheritance laws may be different to theUKand it is essential to make provision for any foreign property in a Will.
If you run a small business: It’s possible with sole directors, that if you die without executors and trustees no one can make decisions on how to run the business and to authorise payments. Assets can be frozen and your business could collapse.