Where there's a Will, there's generally a way..
In the current economic climate, everyone is looking to cut back on any "unnecessary" expenditure, but can you afford not to make a will? If you die without making a will statute will determine how your estate is distributed.
From 1st February 2009, if you die leaving a spouse and children, your spouse will receive the first £250,000 (previously £125,000) together with gross interest from death until payment. If the estate is worth less than £250,000 your children receive nothing. Any remaining funds will be divided into two with one half held on trust for your children and the other half for the benefit of your spouse for their lifetime. If you don't have children, your spouse receives the first £450,000 (previously £200,000) and the remainder is split between your spouse as above and your parents if they are still living. If your parents are no longer alive, their half is split between any brothers and sisters or other family members and could if there are no other family members or spouse ultimately end up in the hands of the Crown.
Although this might seem adequate this could be disadvantageous for a number of reasons:
- You lose control as your estate may not be distributed in accordance with your wishes;
- If you have an un-married partner they will not be provided for as statute does not recognise a "common law" partner;
- You have not had the opportunity to do any tax planning, which could result in a large proportion of your estate being used for tax;
- The intestacy provisions could result in financial hardship for your spouse as they would not be entitled to all of your estate;
- In situations of family conflict your estate may pass to individuals you would not wish to have benefited;
- If you have children from a previous marriage they may lose out completely if your new spouse inherits the whole of your estate, if it is worth less than £250,000;
- A guardian for your infant children can be appointed under a will but is not appointed under intestacy; and
- Your children will automatically inherit the funds at 18 whereas you may wish them to receive the capital at a later age.
Can you afford not to have a Will? It allows your loved ones to be thought of and provided for in the way which you would have wished for them and ensures that all aspects of your estate are dealt with. If you already have an existing Will it is also important that you keep it up-to-date to ensure that all clauses are still valid, as it is possible to die partially intestate putting you back in the position above.
For more information about Higgs' Private Client department please click here or contact Verity Kirby on 01384 342100.
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