Writing a will? Here’s what you need to know

A will has a vital purpose in ensuring your wishes are carried out when you die, yet half of adults don’t have one. Here’s why it’s important as well as some of the key issues to consider.

A will is a legal document that allows you to put on record what you want to happen to your estate after you die. Without one, the process of sorting out your assets can be more stressful and time-consuming for your loved ones, and your inheritance might not go to who you want. A will can also ensure your estate is inherited in the most tax efficient way, protecting your legacy.

If your spouse, children or anyone else depend on you financially, a will is very important, especially if there are difficult family relationships which could be inflamed by someone laying claim to something in your inheritance.

A will is also crucial if you wish to leave anything to anybody other than family members. For instance, you may wish to leave money to your favourite charity, which is also a good way to reduce your inheritance tax liability. You can even specify how the charity should use the money, though it's wise to discuss your wishes with the charity because there are instances where charities have had to refuse gifts because they couldn't comply with the conditions attached.

Despite the vital function that a will serves, half of UK adults don’t have one, according to a recent study by Canada Life. This includes a third of over-55s, which is as surprising as it is worrying given the abundance of simple and inexpensive will writing services that are available.

“It's one of those jobs that a lot of people put on their list and forget about,” says Helen​ Richardson, Independent Financial Adviser at Ascot Lloyd. “It’s easy to think it’s not going to happen to you so you don’t need to worry about it, certainly when you’re younger. Or people just don’t like to think about it, but they often don't understand the implications of not having a will.”

Intestacy rules

When someone dies without a legally valid will, the rules of intestacy decide how the estate will be shared out. In England and Wales, your spouse or civil partner will inherit everything valued up to £270,000. If your estate is valued at more than £270,000, half of what remains over that amount goes to your partner and the other half is divided equally among your children. If there is no surviving spouse or civil partner, the whole estate divides equally among your kids.

Intestacy rules in Scotland entitle the surviving spouse or civil partner to housing up to a value of £473,000 (so long as they were resident in the property at the time of their partner's death), household contents up to a value of £29,000 and cash savings up to a value of £50,000 (or £89,000 if the deceased was not survived by children).

One third of the remaining estate, excluding land and buildings, also goes to the spouse or civil partner, with another third going to the deceased children. If there are no children, the spouse or civil partner gets half of the remaining estate (excluding land and buildings), and vice versa.

Whatever is left at the end of this distribution goes to the 'free estate', which is the following groups in order of priority (if the first group doesn't exist, the remaining estate goes to the next existing group): children and adopted children, grandchildren, parents and siblings (half and half), spouse or civil partner, and ancestors. If there are no surviving relatives at all, the Crown will take the whole estate.

Please note, this is a simplified version of intestacy rules in England, Wales and Scotland. It is also possible for the beneficiaries of estates to use a Deed of Variation to distribute assets contrary to intestacy rules after death. In complex situations the advice of a legal expert is invaluable. But in all instances it’s important to note that intestacy rules exclude stepchildren, charities, friends or anybody else you'd like to benefit from your estate.

“It's very black and white and certainly no consideration is given to what your wishes would be. It’s not uncommon to underestimate the complexity of your financial or indeed family affairs, which can make distributing an estate under intestacy rules challenging,” says Richardson.

“There are a wide range of potential implications without a valid will in place. If you have a situation where, for example, you don't work and you were relying on your spouse who's just died, and you have ongoing costs to support and care for your kids and generally get through life, you potentially won’t be able to access their part of the inheritance to pay for these things.

“Will your estate be utilised how you’d like it to if your spouse remarries after you die and has more kids? Though we don’t want to think about such things it’s important to understand how these very common scenarios could mean your inheritance wishes are not met. The last thing anyone wants is for there to be any bad feelings among loved ones because of an inheritance.”

Professional support

Even if you think your inheritance wishes are simple, it’s sensible to consider using a solicitor that specialises in writing wills. Unfortunately, not all will writing services offer the same quality, and a badly written one will not only fail to consider all potential scenarios but could even rule a will as legally invalid or open to challenge. Ascot Lloyd can recommend reputable solicitors that we have worked very closely with for many years.

Working with both a solicitor and an independent financial adviser when making a will could prove invaluable, as a solicitor alone does not have the expertise to ensure you are making the right financial decisions. For instance, are there any opportunities to reduce your inheritance tax liability? Would it be wise to consider setting up a trust? Or even just ensuring you have completed the death benefit nomination forms in your pensions, as failing to do so, which is surprisingly common, could mean your beneficiaries can’t access that money for over a year.

“We take it every step of the way,” says Richardson. “The solicitor understands the legal side but it’s important to have someone who makes you think about things like tax or even just would your spouse and children be able to cope financially should you die suddenly? What are your desires? Is there anything you want to make sure is built in? Maybe you have a grandchild who is brilliant at a particular sport and you want to support them to go to a special university.

“One of the most important things is appointing your executors. Who are the people you trust to handle your estate when you pass away? Who will make sure your wishes are met as soon as possible? It's a big task with a lot of work so you need to make sure they're comfortable doing it.

“There are a lot of things to consider when writing a will, but working with a good solicitor and financial adviser will make it a simple process while ensuring you are making the right decisions for yourself and your desired beneficiaries.”

If you are interested in making a will, or already have one and would like an expert to check it over, book a free callback from an Ascot Lloyd independent financial advisor.