The turn of the New Year is an excellent opportunity to review the events of the previous year and consider plans for the future. It is therefore also an excellent time to make a Will if you have not already done so or to update an old Will if your circumstances have changed.
The primary reason to make a Will is to ensure that your assets are distributed to the right people after you die. If you die intestate (without a Will), then intestacy law dictates who inherits your estate and this could be completely at odds with your wishes. Your entire estate could even pass to the Crown if you die intestate without next of kin! The scale of this potential problem is highlighted by recently published research which indicates that approximately 58% of adults in the UK have not written a Will.
The following are some further good reasons to make a Will:
- To provide for unmarried partners
Unmarried co-habitation with a partner is commonplace, yet under intestacy law co-habitees receive nothing in the event of their partner’s death. This situation can be avoided by making a Will which specifically leaves gifts to your partner. If you own property jointly with your partner as “tenants in common” then this may be all the more important as your share in the property will not automatically pass to your partner upon death.
- To leave gifts to friends, loved ones and charities
Intestacy law generally provides for only certain family relatives to inherit your estate in a certain order. This again does not allow for flexibility to make legacies or gifts of personal possessions to friends and loved ones after your death. You may also have a particular charity in mind which you would like to make a donation to from your estate. Put simply, the best way to provide for those who you want to benefit on your death is by making a provision for them in your Will.
- To put in place your wishes
A Will is useful not only to record any distributions which you would like to be made out of your estate, but also to set out your wishes for practical matters. For example, your Will can be used to specify your funeral wishes (for example whether you would like to be buried or cremated) and to identify people who you would like to appoint as guardians for your children.
- To elect succession law
If you own assets abroad, then it might be necessary for you to make a separate Will in the country where that asset is located in order to deal with that asset specifically.
With regard to assets located in the EU, the general rule was that many assets (especially land) would be distributed in accordance with the law of the country where the assets were located. This could create difficulties if the law of that country ‘forced’ the property to pass to a certain beneficiary despite the deceased’s wishes. However, a recent new piece of EU legislation has sought to eliminate this problem. It is now possible to make an express election of the law which you would like to apply to determine how any assets you own in another EU country should be distributed. For example, a UK national who owns property in Spain can now elect for the succession law of the relevant part of the UK to apply to their Spanish assets.
- Tax planning
Inheritance tax (IHT) is paid at a rate of 40% on the value of an estate above a certain threshold – currently £325,000. Making a Will may enable you to reduce your IHT liability by taking advantage of tax-free allowances and exemptions. By making sufficient gifts to charities, for example, it is possible to reduce the rate of IHT to 36% on some estate assets.
- To ensure the welfare of your pets
The welfare of pets can be a particular concern and you can make provision for them in your Will as they are technically personal possessions. If you do not have a friend or family member in mind who would be able to look after your pet then you could entrust them to the RSPCA.
A word of caution
The general principle in English law is that you are free to choose whomsoever you would like to inherit your estate. However, there are some exceptions to this and the recent case of Ilott v Mitson  EWCA Civ 797 illustrates that the court will override this principle where it is ‘just and equitable’ to do so. Broadly, the facts of this case were that an estranged daughter made a claim against her mother’s estate because her mother cut her out from her Will. The daughter was eventually successful in her claim, with the Court of Appeal ruling that – given all the circumstances – it was unreasonable for the mother not to make provision for her daughter.
It is important to bear in mind that the specific facts of this particular case influenced the decision reached. For this reason, it would be wrong to view the outcome as being indicative of a general shift in Court policy away from the established principle that you are free to dispose of your assets as you see fit. What this decision does demonstrate is the Court’s ability to consider applications against your estate from certain individuals who claim that they should have received a financial provision. It is therefore necessary to be diligent when making your Will and legal advice should be sought to ensure that your Will is interpreted in accordance with your wishes. Edwin Coe can help you make your Will and minimise the risk of a successful claim being made against your estate.
If you aren’t receiving our legal updates directly to your mailbox, please sign up now
Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.