Why have a will?
We are often asked by clients why it is so important to have a Will. The simplest answer is that you have control over:
- Who is appointed to deal with your estate
- Who gets what from your estate
- The protection of assets
- Who will look after your children
- How much Inheritance Tax you will pay
- What will happen to your business
Looking at each of these in a little more detail:
If you die without a valid Will in place it is said that you die Intestate. This means that the courts will be required to appoint one or more administrators to deal with your estate. These administrators may not know anything about you, your family or your affairs and they will be able to charge your estate for the services they provide, reducing the amount available for distribution to your loved ones.
The rules of intestacy will dictate who gets what from your estate. Depending on the assets in your estate, this can leave the situation where your partner may have to move out of the family home so that it can be sold in order to pay out to the beneficiaries of your estate. Due to the way the rules of intestacy are applied, relatives that you may not have seen for years may be due an inheritance from you. Even a basic Will allows you to pass your assets as you want.
If you have minor children and are the last parent with parental responsibility, dying without a Will in place means those children will not have a legal guardian appointed for them. Many people think that if they have surviving family, they will automatically become the guardians for their children, but sadly this is not necessarily the case. In a Will you can appoint guardians of your choice and provide financially for them to look after your children if you are not there.
The rules of intestacy do not necessarily allow for your assets to be passed in a tax-efficient way. When preparing a Will you can consider measures that will ensure that as much of your estate as possible ends up with your beneficiaries and not with the taxman!
If you run your own business and have a valid Will, you can appoint people to continue running the business in your place if you die. Without a Will, your business could grind to a halt as there may be no one capable of signing off on deals, paying the suppliers, paying the staff or paying the bills in general. With a Will, you can also ensure that the business is passed on to whoever you want.
In summary, the main reason to have a Will is to control your estate when you die. You decide who deals with your estate, who gets what from your estate and how they get it, you can stop people getting anything from your estate if you don’t think they should and you can make sure your young children are properly cared for. A Will allows you to ensure the tax man only gets the minimum amount of tax, if any at all, and that your business continues. A Will can even make sure your pets are taken care of!
It is rare that one document can do so much, so why do two-thirds of people not have a valid Will? I really don’t know!
Tax and Probate Manager