Millions of people who own assets such as property that are worth considerable sums and have families to care for have failed to make a will.
Insurer Aviva’s Real Retirement Report reveals that more than two-fifths of those over 55 have not got round to it.
Here’s what you need to know about making a will and why it is so important.
1) When there is no will, the Government decides who gets what from your wealth, referred to as an estate.
A spouse or civil partner is first in line but won’t necessarily receive everything. Next in the queue are children or grandchildren, parents, siblings or their children, half-siblings or their children, grandparents, uncles and aunts or their children and finally half-uncles and aunts or their children.
If there are no relatives, the estate passes to the Crown, or the Duchies of Cornwall or Lancaster. These rules are known as the laws of intestacy.
Emma Myers, of Saga Legal Services, which provides a fixed-fee will writing service, says: ‘These rules only benefit spouses and blood relatives and don’t take into account your feelings towards them. The only way to have full control is to have a will.’
In Scotland the rules are slightly different, but a surviving spouse is still first in line to inherit.
2) There are different types of wills, including single wills, ‘mirror’ versions for couples with the same or similar wishes, and trusts, where wealth is managed by individuals on behalf of a beneficiary. This could be a better way to provide for children or for relatives with mental disabilities.
‘Having the wrong type of will could have repercussions on what happens to your estate and how it is divided when you die,’ says Myers.
3) A guardian who agrees to look after your children if you die can be appointed in a will. Otherwise social services might intervene to decide who should care for them if both parents die.
4) If you instruct a solicitor to draw up your will, the cost is likely to be between £150 and £300 for a single will or between £200 and £400 for mirror wills. Anything more complicated will cost extra.
Some online providers, such as Saga and the Co-op, also offer a fixed-fee service. Trade unions often offer it free to members, and some charities such as Cancer Research UK and Barnardo’s do the same for anyone over 55 in the hope that the charity is remembered in the will.
5) Paying a few hundred pounds now – or in some cases nothing – to arrange a will could save thousands of pounds in tax in the future.
For example, those with assets valued over the nil rate threshold of £325,000 will pay 40 per cent inheritance tax to the State on any sum above that threshold. But you can leave everything you own to a husband, wife or civil partner in a will and pay zero inheritance tax – known as a spouse exemption. A husband or wife can then leave up to double – £650,000 – to beneficiaries free of inheritance tax when they die.
6) Paying to make a will can be done in three ways. First you can use a solicitor, which is more expensive. But it is worthwhile for those with complex affairs, such as having had previous marriages and children from different relationships or owning property abroad.
Second, there are will writing services, some costing less than £100, which look official but are not always provided by legally qualified or regulated will writers. And third, there is the do-it-yourself option. Documents can be downloaded from the internet or bought from a stationer for as little as £10. But you risk creating an invalid will.
Pick a solicitor or will writing service with the right credentials. Myers says: ‘While rare, there are cases of will writers taking advantage of clients, so if you feel at all suspicious you can always walk away.’
Solicitors at the top of their game will either have a Wills and Inheritance Quality Scheme mark, recently introduced by the Law Society (lawsociety.org.uk), or will be listed by the Society of Trust and Estate Practitioners (visit step.org).
If you use a will writing company, choose one belonging to either the Society of Will Writers (willwriters.com) or the Institute of Professional Will Writers (ipw.org.uk).
8) Mistakes made during the writing of a will can make it invalid. Typical errors include not having the document signed by witnesses, or asking a witness who is also a beneficiary to sign. Carol Mason, a partner at Morecrofts Solicitors in Liverpool, warns that even a stapled will or one put together with a paper clip can nullify its contents. ‘This suggests there may have been an additional document at some time,’ she says.
9) Marriage cancels out any previous will, unless impending nuptials are accounted for when the document is created. Mason says: ‘Divorce also changes the terms, as someone referred to as husband or wife no longer has that title.’
Unmarried couples are not even protected by the laws of intestacy. If one partner dies without a valid will, the other stands to inherit nothing.
10) Executors - those named in a will who must distribute your wealth and ensure your wishes are adhered to - need instructions about any ‘digital legacy’.