Thursday, 31 May, 2012
According to a recent survey as few as one in three adults has made a will.
Although it may be a morbid thought, we are all going to die. If it happens and no will has been made, it adds financial nightmare to the grief of your loved ones, possibly leaving them temporarily unable to access your cash.
Each year the Law Society runs an awareness campaign to highlight the importance of using a solicitor to draw up a will.
If you die without having made a will, i.e. Intestate, your estate will be dealt with under the Administration of Estates Act (NI) 1955, which has a specific format for the distribution of your estate which may not be in accordance with your wishes. For example, if you are not married or in a civil partnership, even if you co-habit with your partner, they will not be entitled to inherit anything from you unless you specifically mention them in a will. Although effectively living like husband and wife and contributing equally to the running costs of a home, it may be owned only by one partner and when that person dies the real problems start as the surviving partner could end up with nothing unless the property was held in joint names. The only remaining option is for the surviving partner to go to court to claim an interest in the deceased’s estate.
Even if you are married, without children, your spouse will not inherit your entire estate as other living relatives such as your parents and siblings may be entitled to a share.
If you are separated from your spouse and have not made a will, your estranged husband or wife could inherit all or part of your estate.
A will also gives you the opportunity to appoint Executors, i.e. persons who will administer your estate and carry out your wishes after your death. It also gives you the opportunity to appoint Guardians of your children. A lack of provision for Guardians could result in court proceedings after your death to determine where your children should live.
So what should you do?
The best advice is to instruct a solicitor to draw up a will.
A simple will can cost as little as £75.00. A more extensive will obviously increases the cost but could be money well spent in the long run as if the assets in the estate are sizeable there may be Inheritance Tax implications, so good legal advice is important. A home made or DIY Will is not recommended as in many cases they are not properly completed or executed.
A solicitor will be able to advise you on the effect of Inheritance Tax on your estate. Inheritance Tax (IHT) is charged at 40% on assets worth more than £325,000.00 that someone leaves when they die, unless it is left to a surviving spouse. Recent changes in the IHT provisions have allowed the individual Inheritance Tax threshold of £325,000.00 to be transferred allowing couples to combine their allowances and so escape tax on the first £650,000.00 of an estate.
Once you have made your will it can be changed at any time and in fact it is recommended that it be reviewed every 3 – 5 years.
If on the other hand a relative has died and you have been excluded from that persons will and believe that you would have been entitled to inherit, you have the option to bring the matter before the courts.
In a recent English case, the parents of a Dr Gill both made wills in 1993 providing that the first to die would leave their estate to the survivor and that the second to die would leave the combined estate to the RSPCA. The estate was valued at approximately £2,000,000.00. There was no provision for their daughter Dr Gill. Dr Gill’s father died in 1999 and her mother in 2006. Dr Gill, an only child expected to inherit all the combined estate and brought a claim against the estate on the basis that her mother was subject to undue influence by her father, made the will in the lack of knowledge as to what she was doing and further that under the doctrine of Proprietary Estoppel the contents of the will should be overturned. The court held that her mother was forced into making the will cutting out her daughter by an overbearing and controlling husband. The trial judge stated that even if he had not set aside the will, that he would have awarded a farm contained in the estate to Dr Gill because of her Proprietary Estoppel claim. Proprietary Estoppel is a remedy based on fairness and it was accepted by the court that Dr Gill had been led to believe that she would inherit under the will.
As can be seen the consequences of not taking a couple of hours out of your day to have a properly drawn will executed can have significant ramifications after ones death.
Martin Hart is a Partner in Hart & Co Solicitors who can provide advice on a range of legal issues.