I wish to start this piece by wishing my wonderful parents a happy wedding anniversary. They were married in 1981 on 1st August. Some would say that their wedding was slightly overshadowed by the royal celebrations that took place merely three days before. My parents’ wedding was a simpler day altogether but unlike the royal couple, their marriage has withstood the test of time. I am pleased to say that they remain happily married and are today celebrating their 37th wedding anniversary. They are both also retiring this year, in the hope that they can spend more quality time together.
My parents have often discussed with me and each other, the need to prepare their wills. Despite the fact that my mother will be celebrating a significant birthday in October and the fact that she has a solicitor as a daughter, they are yet to put pen to paper. It would appear that they are not the only ones. Statistics show that only one in six of us have made a will, or will make one before we pass away. Naturally talking about death and what happens after our days is a subject that people, quite frankly do not wish to discuss. However, it is crucial that we face up to the inevitable. It may be an old adage but it remains true that there are only two certainties in life – death and taxes.
Failing to plan for the inevitable could lead to families losing out on an inheritance or losing out by way of increased probate fees and solicitors fees (and who wants that). A properly drawn will also helps to discharge the moral responsibility that each of us have to ensure that we do not leave our financial affairs in a tangle and that our families are not financially embarrassed, either by a spouse receiving too little inheritance, or in the case of minor children, inheriting too much too soon.
Therefore, what are the key benefits of making a will? Primarily, making a will allows you to decide who gets what and when they get it rather than the law deciding. It therefore follows that the lottery of intestacy laws which apply if a person passes away without executing a will are completely avoided. A will allows you to provide for partners, cohabitees, distant relations, friends and charities and enables you to provide for a legal guardian for your children if all those with parental responsibility for the children have sadly passed away. A properly drawn will can also lead to a saving in inheritance tax, for example leaving an estate of up to £1 million to a spouse will qualify for the spousal exemption. Conversely, leaving 10% of an estate to charity will reduce any inheritance tax payable on the balance of the estate. It is also possible to mitigate against any inheritance tax liability by way of utilising the nil rate band threshold together with the residence nil rate band threshold.
However, if the statistics alluded to above are to be believed, it would appear that the majority of us need further convincing. An examination of the intestacy rules follows.
If a person dies without a will they are described in Wales as dying intestate and the intestacy rules will govern who inherits their estate. If we return to my parents’ current situation, should either one die intestate, it is a common misconception that the surviving spouse will inherit the entire estate of the deceased spouse. Instead, the surviving spouse will receive a sum of £250,000, known as the statutory legacy, all of the deceased spouse’ personal chattels and half of the residuary estate. The remainder of the residuary estate would be divided equally between the deceased’s children, who would be entitled to claim their inheritance at the age of 18. In my parent’s case, half of the residuary estate would therefore be divided equally between my sister and myself. The application of the intestacy rules when a deceased spouse passes away leaving a spouse or civil partner and children can in some situations leave the surviving spouse or surviving civil partner with insufficient funds and capital. If the family home is owned by the deceased spouse on a sole basis and worth more than £250,000.00, the children of the marriage at the age of 18, would be entitled to a share of the family home. This may in turn, lead to a myriad of undesired consequences, such as the payment of capital gains tax, if the property were to be sold in the future and the children already homeowners in their own right and consequently unable to rely upon the residential exemption. If an adult child were to succumb to financial difficulties, or if his or her marriage were to breakdown, the surviving spouse’s interest in the property may also be jeopardized.
Conversely, when dealing with a more modest estate and perhaps more prevalent when dealing with second marriages, the intestacy rules could result in the new spouse inheriting all the estate with the children of a previous marriage or relationship receiving nothing.
If the deceased is married or has entered into a civil partnership and has no children then pursuant to the intestacy rules the survivor will inherit the entire estate. No provision is made under the intestacy rules for parents or siblings if there is a surviving spouse or civil partner. This may lead to an unmerited situation if the deceased is recently separated, but not yet divorced, or if the marriage is of a relatively short duration, with perhaps husband and wife only knowing each other for a short period before getting married.
More and more of us in today’s society are deciding to cohabit. But there is no such thing as a common law marriage. Therefore, unmarried couples regardless of how long they have been together receive nothing under the intestacy rules. If a person is not married and dies intestate, the estate will be distributed according to the intestacy rules, namely children inheriting first, and if none then parents, and if they are not alive then siblings, or if they are predeceased then nieces and nephews. Cousins of the deceased would then inherit the estate if there are no surviving nieces or nephews. But what if there are no surviving family members left to inherit the estate? Does the estate go to charity instead? Sadly, not. The estate in that unfortunate eventuality is inherited absolutely by the Crown.
I am currently dealing with several retainers, whereby deceased partners have died intestate. No provision has been made to their surviving partners. Instead, their estates are inherited absolutely by other surviving family members, more often than not, the adult children of previous relationships, some of which were not even on speaking terms with their deceased parent. This undoubtedly results in contentious litigation battels that resultantly depletes the estate, which is used to fund the parties’ legal fees. There are no winners here!
And so, the moral of the story…? if walking down the aisle is not a viable option, a considerably cheaper alternative would be to make a will, in order to provide for an unmarried partner.
Preparing a will need not be a complex process. It certainly is not as time consuming as organising a wedding. The formalities, as laid down in Section 9 of the Wills Act must be followed. In brief, a will shall not be valid unless it is in writing and signed by the testator or by some other person in his presence and by his direction, it appears that the testator intended by his or her signature to give effect to the will and the signature is made or acknowledged by the testator in the presence of two or more witnesses present at the same time. Each witness must also sign and attest the will.
The testator must possess the requisite mental capacity to make a will. The test for capacity to make a will is set out in the case of Banks v Goodfellow 1869. The testator must understand the nature of making a will, the claims against the estate that he or she ought to consider and the extent of his or her estate. In addition, the testator must not be suffering from an insane delusion. In addition, for a will to be valid, the testator must intend to make it and must know of and approve its content. A will is invalid if it can be proved that the testator was induced to make it by pressure, force, fear or fraud or if the testator was unduly influenced to make it.
In terms of its content a will must appoint executors to deal with the administration of the estate. These can be lay executors such as family members, or professional executors, for example solicitors or accountants. A maximum of four people can be appointed. Various legacies can be included within a will, such as a gift of “all my jewellery”. Money legacies can also be made to individuals and to charities prior to the remainder of the estate being distributed. A will can also record a person’s funeral wishes and is an opportunity for parents of younger children to appoint a legal guardian to care for their children and acquire parental responsibility for those children, if all those with parental responsibility for the children have sadly passed away.
Should I therefore give my parents a home-made will pack as an anniversary present? I think not for various reasons! All too often, I find in practice that incorrectly homemade drawn up wills are proved to be invalid which will result in an estate being treated as if the deceased had died intestate. The slightest error in a will can lead to a legal dispute. The testator may of course think that his or her homemade will is clear but he or she will not be here to clarify any misunderstanding when it really matters. I recently received a home-made will from a client and was obliged to inform him that the will was invalid due to the fact that his signature had only been attested by a single witness. Luckily that error was easily rectified. However, other errors will certainly lead to court proceedings in order to determine the validity of the will. There are many pitfalls involved in the drafting of wills. Those who engage in the work without the required specialist knowledge will risk negligence claims from aggrieved clients and their families.
The cost of preparing a will should not be an excuse to justify why so many people are yet to prepare one. A simple will, can usually be prepared by a solicitor at a cost of approximately £150 plus VAT. As a firm, we also take part in Ty Hafan’s write a will campaign, whereby a will is drafted free of charge and in lieu of this, a donation is made to Ty Hafan in support of the charity’s invaluable work. I will again be supporting this campaign in 2019.
As a specialist wills and probate solicitor, I can clearly see the merit in preparing a will. What isn’t clear is what do I get for my parents as their anniversary present?
Written by: Catrin Griffiths – Head of Private Client
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Published 08/08/18