Wills FAQ

Frequently asked questions about wills

Why should I make a Will?

A Will ensures that your wishes are carried out regarding your estate and responsibilities.

If you die without a Will, legal rules govern the distribution of your assets and who will oversee the administration of your estate.

There is some limited protection for married couples and civil partners, but it is important to note that unmarried couples living together have no automatic rights under the intestacy rules and the period that they may have lived together is irrelevant.  Please read our guide “What happens if I do not have a Will”.

A Will also gives the opportunity for tax planning, especially when you own business assets. A failure to make a Will in these circumstances can mean that will be an unnecessary tax burden imposed on your relatives.  Also, a Will enables business owners to make arrangements regarding the continuation of their business.  (Please see “Wills for business owners”).

In the case of second marriages a Will is important to ensure that the children of any prior relationship are properly catered for on your death.  

Making a Will enables your family and those people you want to benefit from your estate to be able to deal with things as simply and efficiently as possible at what will be a distressing time for them.

If you are contemplating divorce proceedings you should make a Will as quickly as possible, especially if you have already have a Will leaving gifts to your spouse, as they will continue to take effect until the Decree Absolute.

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What happens if I do not have a Will?

When a person dies without making a Will (intestate) strict rules come into operation dealing with who may act as the personal representative (the person responsible for administering the estate including obtaining valuations, paying any tax and distributing the estate) and who will be entitled to receive the assets you own.

  • It is not automatically the case that your husband, wife or civil partner will receive all of your assets. This could leave them in serious financial difficulties.
  • Claims by other beneficiaries entitled under the intestacy rules may mean that the family home will have to be sold.
  • Unmarried parties will receive nothing and potentially distant relatives or even the government will inherit your estate.
  • Tax saving measures will not have been undertaken.

As a business owner there could be many obstacles in enabling the business to continue to be run as you would want.

The Intestacy Rules

  • If you die leaving a husband, wife or civil partner and children then your spouse or civil partner is entitled to all of your personal effects and belongings and a lump sum of £250,000.  The balance of the estate is then divided equally between your children and your surviving spouse or civil partner.
  • If you die leaving a spouse or civil partner and no children then your spouse or civil partner will receive the whole estate.
  • If you do not have a spouse or civil partner or any children the estate is divided between (in order) your parents, brothers and sisters, nieces and nephews, grandparents, uncles, aunts or certain cousins but if there are no relations who fall into these categories then ultimately the estate will pass to the government.

How can these rules affect me?

  • As your children are potential beneficiaries under the intestacy rules they would be entitled to that share in the estate at 18. Many people are concerned that this is too young an age to handle potentially large sums of money.
  • As well as the potential for certain relatives who you may not get on with to receive assets from your estate, by not making a Will any one of your relatives in the categories mentioned could apply for a Grant of Representation (known as a Grant of Letters of Administration). This is an important consideration as the role of a personal representative is important and enables them to deal with your assets. By making a Will you decide who that person should be.  (Please see our “Guide for Personal Representatives”).
  • The share of the estate that is set aside when you die leaving a spouse or civil partner and children may not be sufficient for your spouse or civil partner to live on and the net effect of this may mean that your home has to be sold for that person to make ends meet.

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Why should a solicitor draft my Will?

The language of Wills can be confusing as it is formed on historical precedents.

Whilst Wills can be bought “off the shelf” we have seen that on occasion these result in difficulties for those intended to benefit.  Examples include failing to ensure that the Will is properly executed, and failing to appoint an executor to administer the estate.  These problems can result in additional expense in trying to obtain the Grant of Probate.

There are numerous non-solicitor Will writers currently operating in the UK. At present these organisations are unregulated and some Will writers are unqualified to fully advise on the provisions of a Will. In our experience these services can be surprisingly expensive.

In comparison, solicitors’ belong to a regulated profession and are insured in the rare case of something going wrong. Solicitors can also hold the original or a copy of a Will, ensuring that it can be safely kept and easily located.

A poorly drafted Will can result in additional and unnecessary expense and potential disputes among beneficiaries.

A professionally drafted Will should be seen as the right safeguard for your family’s future, while providing you with peace of mind.

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What is involved in making a Will?

  • As part of the process in making a Will you should consider:
  • The identity of the people you would like to be the executors of your Will to will ensure that your wishes are carried out.
  • This can be someone who you also want to be a beneficiary. If there any beneficiaries who are children you will need two people to act in this role.
  • Professional executors are often used because they have the experience in dealing with potentially complex estates or those that may involve possible disputes between beneficiaries. Our firm regularly acts in this capacity providing a reliable, professional and cost effective service.
  • If you have any specific funeral wishes, including a desire to donate your body to medical science, this can be included in the Will.
  • Who you would like to act as guardians for any infant children so that they will make decisions regarding their upbringing, education and general welfare.
  • Whether there are any personal possessions you would like to leave to specific beneficiaries.
  • Whether you want to make any cash gifts to any individuals or charities.
  • How the rest of your estate is to be left, for example, to your spouse or civil partner and then your children.
  • You should consider what you would like to happen to your estate in the unlikely event that you, your spouse/civil partner and any children were to die in an accident together.  
  • What happens to any land or property you own and how it is described on the title documents as this may have a bearing on any wishes you want to make specifically regarding that property.
  • Whether you want to exclude anyone who would normally be provided for in your Will?  

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What special considerations apply to business owners?

Business owners that have spent many years building a successful venture will want to ensure that appropriate mechanisms are in place to ensure that business succession can proceed without undue complication.

It is also worth reviewing a Will on a regular basis to account for any changes in the business structure, especially if a sale of the business is contemplated.

Important tax benefits can be maximised for individuals who own business assets.

Particularly important considerations include:

  • Choosing executors with particular business knowledge to act in dealing with your business interests only, if you would rather have separate executors for the rest of your estate.
  • Ensuring that there is a proper succession planning for your business so that
  • You have in place structures to secure, as far as you are able, continued operation of the business.
  • The application of business property relief (discussed below) can be maximised by appropriate wording in a Will.
  • The incorporation of discretionary trusts in a Will can also utilise the advantages that business property relief provides.

Business property relief (BPR) is available for businesses operated by a sole trader or a person having an interest in a partnership or shares in a private company against which the value of the business interest will be a 100% relief from inheritance tax on death. However:

  • The asset must have been owned for at least two years prior to death (though this may be lost in certain circumstances). For this reason any sale that is contemplated should be undertaken with appropriate accountancy advice, in conjunction with the review of any Will that is being or has been made.
  • Whilst BPR is available it is important to note that it is not available for interests in businesses which are wholly or mainly holding investments. However, even trading companies may not satisfy the requirements if, for example, they are a holding vehicle for subsidiary companies involved in investment.
  • If a business owner makes a Will leaving assets which could benefit from BPR to a spouse or civil partner, then this particular relief is lost as it is absorbed by spouse/civil partner relief of 100% of the value of the assets gifted.  An alternative would be to consider gifting the assets to any children or their issue so that the BPR is preserved on the relevant assets.  The obvious concern will be what children or grandchildren may decide to do with these valuable assets, particularly if these form the bulk of your estate and on which any spouse or civil partner would want to rely to maintain a standard of living. In these circumstances it may be worth considering leaving the business assets into a discretionary trust.

A discretionary trust is a flexible way of ensuring that gifts are given to a class of beneficiaries you want, but also enabling the possibility of maximising BPR on business assets if they are the only assets in the trust.  You can name a spouse/civil partner as one of the beneficiaries together with children and grandchildren for example and as the trust is discretionary in nature it enables the trustees (very often the executors in the Will) to choose which of the beneficiaries should benefit from the trust and when that is to occur.

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What if I want to exclude someone from my Will?

In making a Will you are entitled to leave your Estate to whomever you want, but certain legislation can restrict these wishes.

The Inheritance (Provision for Family and Dependents) Act 1975 allows certain specified groups of people to claim against an estate if it is deemed that the Will has not made reasonable financial provision for them.

The categories are:-

  • The deceased’s spouse/civil partner.
  • The deceased’s former spouse who has not remarried or civil partner who has not married or entered into a new civil partnership.
  • Anyone who immediately before the death of the person whose Will is in dispute was during a period of two years prior to that date living in the same household as the deceased as a spouse or civil partner.
  • Any son or daughter.
  • Any person who has been treated by the deceased as a child of the family.
  • Anyone else for whom the deceased has been making a substantial contribution for their maintenance to the date of death.

What happens if a claim is successful?

The court has the power to set aside a Will and make such provision for the person making the claim as it considers reasonable.

The courts have taken a general view that adult children who were not financially dependent upon the deceased prior to the date of death should not necessarily receive any benefit from an estate where they have been excluded, but each case will turn on its own facts and consideration perhaps should be given to making a gift to such a beneficiary but if not then it is always advisable to make a separate statement which can be used as evidence should a claim be made setting out the reasons why, for example, an adult child has been excluded as a beneficiary.

To discuss further, contact us at probate@berrysmith.com or on 029 2034 5511.

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