Research has suggested that 61% of the UK population has not made a Will. Why should you?
Here are three scenarios highlighting not only why you should make a Will but also why you should make the right Will.
Mr X – an example as to why you should make a Will
Mr X died very suddenly without having made a Will, leaving a young wife and family. The main asset of Mr X’s estate was the family home, which was held in Mr X’s sole name.
As a result of the intestacy rules, not all of his estate passed to Mr X’s wife. Instead, part of his estate, including the family home, passed to his wife and part to his two very young children. Inheritance Tax became due on the children’s share of the estate and the only way to fund the tax was to sell the family home.
Although it might have been possible for us to assist Mrs X in this situation to partially negate the effects of intestacy (and reduce the Inheritance Tax liability), it would have required complicated court applications in order to obtain the approval of the court to balance the interests of Mrs X and her children and it would be unlikely to have resulted in the whole estate passing to Mrs X. Such proceedings could have been avoided had Mr X made a Will.
Mrs Y – an example as to why you should make the right Will
Mrs Y married Mr Y in 1990, following the death of her first husband in 1984, whose entire estate she inherited. Mrs Y had two children from her first marriage, as did Mr Y.
Following Mrs Y’s death in 2004, her estate was left entirely to Mr Y. Following Mrs Y’s death, Mr Y’s relationship with Mrs Y’s children unfortunately deteriorated and he eventually changed his Will, leaving his entire estate to his two children. The result of this was that Mrs Y’s children did not receive anything from the estate of their father, mother or step-father and instead it passed entirely to their step-siblings.
There are only limited circumstances in which a Will can be challenged and a situation such as that above would generally not be sufficient for a challenge to be made. It is therefore imperative that your Will deals properly with your circumstances.
Mr Z – an example as to why you should consider the terms of your Will carefully
Mrs Z was diagnosed with dementia in 2007. Mr Z died in 2009, leaving his entire estate to Mrs Z, including his share of the family home worth £125,000 (total property £250,000) and savings of £25,000.
As a result of Mrs Z’s death, Mrs Z was no longer able to continue living at home and moved into residential accommodation the following year.
Mrs Z’s care fees were £1,100 a week (not an unusual amount) and between 2010 and her death in 2014, total expenditure amounted to over £250,000. Whilst some of this was offset by Mrs Z’s income, the majority of the expenditure was from capital, including the funds received from Mr Z’s estate.
Mr Z may have wanted to leave his entire estate to Mrs Z but had he been aware that it could be substantially reduced by the payment of care fees, he would have been able to safeguard some or all of his estate by making provision for this in his Will.