The risk of not writing a Will

By October 12, 2023Financial Planning
Graphic of a notebook resting on a keyboard alongside a pen, with 'Make A Will' written inside

According to recent research carried out by Canada Life, half of the UK population has not made a Will. Whilst uptake in the older generations is understandably higher, one in three people aged over 55 do not have a Will in place. These statistics are alarming, as dying without a Will can place an additional burden on loved ones at a difficult time. Where a Will has been left, this usually provides clear instructions, including such matters as funeral arrangements, or how possessions are to be distributed, which can ease the burden on family members. Dying without a Will also leaves no named executor to deal with the estate, and family members or other individuals will need to decide amongst themselves who will be appointed as administrator.


Intestacy rules

Many are also not aware of potential issues that can arise by relying on the laws of intestacy, which are a standard set of legal rules that apply in England and Wales if an individual dies without having made a valid Will.

For those who are married, or in a civil partnership, the surviving spouse or civil partner will receive the full value of the estate, unless there are surviving children. In this instance, the surviving spouse or civil partner will receive the first £322,000 of the estate and an absolute interest in one-half of the remainder above this level. The other half is divided equally between surviving children.

For those who are not married or in a civil partnership, the situation is even more complicated.  If the deceased had children, they receive everything split equally between them. For those without children, assets first pass to any surviving parents, then to siblings (if parents are deceased), then to grandparents (if alive), and then to wider blood relatives, such as aunts and uncles. Where an individual dies without any surviving blood-related relatives, the estate is deemed to be Bona Vacantia, and assets are passed to the Crown.


Modern life

The laws of intestacy are particularly complicated, and not widely understood. Indeed, couples that have lived together for many years but are not married or in a civil partnership, can often wrongly assume that this affords each other protection under the law. It is crucial to remember there is no such thing as a “common-law partner” under UK law, and in this situation, an unmarried partner of an individual dying intestate would not be entitled to anything under the intestacy rules.

As financial planners, we see this as a key risk that many are exposing themselves to unnecessarily. The best-laid financial plans for the future could be changed in an instant by the death of a partner who hasn’t made a Will and can leave surviving partners in financial difficulty at a time of great distress. For example, this could mean the unmarried partner being forced to move out of the family home, or funds being left to an estranged spouse. It could also lead to investments and savings being left to surviving blood relatives of the deceased partner.

Making a Will can also deal with important aspects such as guardianship of children, and how funds that children inherit are dealt with. Whilst the legal age of majority is 18, many would consider this too young an age to inherit assets. It may be a good idea to consider whether this should be delayed to, say, 21 or 25 when the beneficiary is potentially more financially aware and in a position to use the funds wisely for further education costs, or a house deposit.


Business owners at risk

Irrespective of the business interest you hold, not holding a valid Will can have serious implications in the event of the death of a sole trader, partner, or director. This could mean that the business assets could be passed to someone who may have no interest in running the business or lack the necessary ability, leaving the business at significant risk. It could also lead to conflict and disputes amongst business partners.


The link to financial planning

Whilst we do not write Wills, we regularly remind our clients of the need to prepare a Will or ensure an existing Will is up to date as part of a wider review of their financial planning objectives. Not having a valid Will, or holding a Will that is out of date, could potentially undermine financial planning strategies, or potentially lead to higher levels of tax being paid.

We recommend speaking to a suitably qualified solicitor when making a Will. This should ensure that the Will is drawn up correctly to reflect your wishes, as mistakes and errors in a Will, which are usually only uncovered after the death of the individual, can lead to disputes and legal expenses in rectifying the position.


Getting over the inertia

Most people understand the importance of making a Will, though many do not see it as a priority, or feel uncomfortable thinking about their own mortality. Given the potential risks many are facing, potentially unwittingly, by not holding a valid Will, we recommend everyone takes the time to make a Will or review an existing Will to make sure that it still reflects your wishes.

Please speak to one of our experienced team here if you would like to discuss the implications in more detail.