Make sure you plan so your estate ends up in the right hands. Penny Lovell shares her thoughts.
Have you prepared a will? Have you made sure to plan your assets so that your estate will end up in the hands of the right people should anything happen to you? These may be personal questions but they are important ones that more of us need to ask our loved ones. Talking about death is uncomfortable, particularly with those we care about. However, making sure that your estate is in order could save a lot of money and heartache in the long run.
New research from Foresters Friendly Society and ICM has revealed that almost two thirds (61 per cent) of us don’t have a will. On top of this one in ten of those who do have a will have told no-one else where it is. If you’re in either of these groups, and there’s a good chance that you are, you may find your money and possessions may not end up in the right hands after your death.
All too often there are headlines about people who have died without a will, and sadly, while in many cases they would have preferred to have left their affairs in order, the result is far from ideal. A very good example of this is Stieg Larsson, author of the Millennium Trilogy books, who died intestate. As a result, his entire estate went to his father instead of his long term partner, who in turn has not benefitted at all from the worldwide success of his books and the subsequent films.
Without a will or effective estate planning you don’t get to control where your assets go. Your estate will be divided amongst your relatives in accordance with government regulation and could even end up with the Crown.
You may be under the impression that wills don’t matter if you are married with children and plan to leave everything to your spouse. However, your husband or wife will only receive the first £250,000 of your estate. After that they have a right to an income, but not the capital, from the remaining estate. This is the default position and one very few people would actively choose.
If you fail to update a will post a break-up, despite being in a subsequent relationship, your estate might end up going to the wrong person entirely and cause great upheaval amongst your loved ones. Bob Marley died in 1981 without a will and, 30 years later, disputes are still raging with new claimants still appearing out of the woodwork.
In addition, if you leave dependent children under 18 behind when you die then you may not have control of who looks after them. Instead, the courts may decide who is appointed as their guardians. This alone should be enough to encourage anyone to make a will.
Worryingly the Foresters report also showed that more than three-quarters (77 per cent) of parents with children under the age of five have not made a will with nearly half those who have (46 per cent) not reviewing it in the last five years. This means that they have not appointed guardians or ensured their children’s inheritance is secured. Again, a famous example of this is what happened to Heath Ledger, whose will was not updated to include his daughter Matilda.
Of course the older we get the more important a will is. Despite this nearly half (46 per cent) of those aged between 55 and 64 have not made a will with more than a fifth (22 per cent) having never thought about making one. One in eight (13 per cent) rely on self-written wills, the validity of which is more likely to be challenged upon death.
March is ‘free wills month’, an initiative that brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their wills written or updated free of charge. This is done using participating solicitors in selected locations around England and Wales.
Whatever your background or situation it is important to have effective estate planning and a current will in place. This will ensure that you have control over your assets and make sure that your wishes are carried out if you aren’t here to control the situation. Making a will can also provide an opportunity for you to think through whether your beneficiaries require financial education.
There are so many stories about people who inherit wealth without any financial training and therefore struggle to protect the assets for their own lifetime and for future generations. Financial training can help prevent this potentially challenging and unhappy outcome. Finally, there are many of us who wish to leave assets to charity and making a will is a great opportunity to explore the best way of structuring your gift.