The dangers of failing to write your will
Not writing a will, or not updating it, can be disastrous for those left behind.
By Emma Wall
Last Updated: 10:13AM BST 05 May 2009
Actress Natascha McElhone with her late husband Martin Kelly Photo: GETTY
The actress Natascha McElhone feared she might lose her home after her husband died without leaving a will, she has revealed.
Although in the end McElhone managed to keep her property with the help of a lawyer, her fears illustrate the dangers to a family's finances if one of its members dies intestate.
Although in the end McElhone managed to keep her property with the help of a lawyer, her fears illustrate the dangers to a family's finances if one of its members dies intestate.
A survey by Standard Life, the insurer, revealed that only a third of people aged 35 to 44 had a will and, perhaps more surprisingly, one in five people aged 65 or more did not. But only with a valid will can you be certain that your estate will go to the right people.
If you do not draw up a proper will, you risk depriving your spouse or partner of their home, increasing the inheritance tax (IHT) burden and leaving parts of your estate in the wrong hands.
On a brighter note for people who fail to make a will, the rules governing an intestate death have been changed to their benefit. People who die without making a will shall now have more of their estate given to their spouse or civil partner.
Previously, if you did not have children, £200,000 of your estate was awarded to your spouse should you die without a will. This figure has now been increased to £450,000. The remainder of an estate is then halved between your parents and your spouse.
Should the parents be dead, it is divided between siblings and the spouse. If you do have children, £250,000 (previously £125,000) of your estate will be awarded to your spouse, before being divided between your children.
The changes mean that inheritance tax liabilities are reduced because the spouse (who is tax exempt) will inherit more, and so the amount going to non-exempt beneficiaries is reduced.
Experts worry, however, that these changes will create a false sense of security and people will feel they do not need to make a will. People may consider their estate to be covered under the law change, when it is still just as important to draw up a will. Failure to do so can cause acrimony and complications.
Look no further than famous stars such as Barry White, Bob Marley and Jimi Hendrix whose families squabbled for years because they all died intestate.
Paul Bricknell, private client associate for Mace & Jones, warned that the increased limits did not mean that a will was now unnecessary. "There are so many reasons to try and avoid the intestacy rules. Failing to make provision for a partner will almost certainly lead to unnecessary legal costs in trying to rearrange an estate after death," he said.
There are many eventualities that are not covered under intestate law. For example, if you die without making a will the rules of intestacy award none of the estate to stepchildren and live-in partners, regardless of the longevity of the relationship.
Unless you have a joint mortgage, the house that you share with your live-in partner, even if they have lived there for 20 years or more, could potentially be passed onto your children, parents, siblings or the state, leaving your partner homeless.
Leaving no will can also mean extensive legal costs for your beneficiaries; failing to provide for a partner or dependent will mean they will have to hire legal help to contest the state's decisions, with no guaranteed result. Complex cases can require the hire of a genealogy expert, at great cost, to clarify relatives' rights to your estate.
Julie Hutchison of Standard Life said making a will and keeping it up to date could save family and friends a great deal of distress and, potentially, money, so it should be regarded as a priority.
Aside from the legal implications, there may be personal wishes that cannot be fulfilled without a will. You may not want your children to inherit at 18 – the set inheritance age in intestate law – considering it too young, or you may not want parents or siblings to benefit at the detriment to your spouse.
If you draw up a will, you can specify how long funds must be held in trust for children, to any age you deem appropriate. You may also exclude family members who you don't want to benefit from your estate in a will.
Stepchildren or live-in partners can only inherit part of the deceased's estate if specified in a will, as is the case for friends or charities. You may also want to outline personal wishes, such as funeral arrangements or who should inherit particular property or items of worth.
Drawing up a will also prevents assets being claimed by the state at the cost of loved ones. Ms Hutchison urged people to make sure they had an up to date will. "A will should be part of bread-and-butter financial housekeeping," she said.
"Once you've bought your first property you should draw one up, regardless of your age."
Even if you have made a will, you need to ensure it is updated. Family make-up can change after the birth of a child or the breakdown of a marriage, but if a will is not updated to include or remove beneficiaries, they will have little or no claim to the estate should you die. The late Heath Ledger's daughter Matilda was left out of a will completed before her birth.
Neither, in the event that both you and your spouse dies, will you have any say in who becomes your children's guardian. If your child or children are under the age of 18 it is essential you have a will for this reason. This also applies to a family member or dependant with special needs.
Nearly half of all marriages end in divorce, meaning that not updating your will can have devastating effects for your spouse and any new children or stepchildren. It is also vitally important that family members know where your will is kept and that a duplicate is stored with a solicitor or financial adviser.
Mr Bricknell cautioned: "Many people's estates are administered as if they are intestate, even if they have a will, simply because no one knows where the will is kept."
If you do not draw up a proper will, you risk depriving your spouse or partner of their home, increasing the inheritance tax (IHT) burden and leaving parts of your estate in the wrong hands.
On a brighter note for people who fail to make a will, the rules governing an intestate death have been changed to their benefit. People who die without making a will shall now have more of their estate given to their spouse or civil partner.
Previously, if you did not have children, £200,000 of your estate was awarded to your spouse should you die without a will. This figure has now been increased to £450,000. The remainder of an estate is then halved between your parents and your spouse.
Should the parents be dead, it is divided between siblings and the spouse. If you do have children, £250,000 (previously £125,000) of your estate will be awarded to your spouse, before being divided between your children.
The changes mean that inheritance tax liabilities are reduced because the spouse (who is tax exempt) will inherit more, and so the amount going to non-exempt beneficiaries is reduced.
Experts worry, however, that these changes will create a false sense of security and people will feel they do not need to make a will. People may consider their estate to be covered under the law change, when it is still just as important to draw up a will. Failure to do so can cause acrimony and complications.
Look no further than famous stars such as Barry White, Bob Marley and Jimi Hendrix whose families squabbled for years because they all died intestate.
Paul Bricknell, private client associate for Mace & Jones, warned that the increased limits did not mean that a will was now unnecessary. "There are so many reasons to try and avoid the intestacy rules. Failing to make provision for a partner will almost certainly lead to unnecessary legal costs in trying to rearrange an estate after death," he said.
There are many eventualities that are not covered under intestate law. For example, if you die without making a will the rules of intestacy award none of the estate to stepchildren and live-in partners, regardless of the longevity of the relationship.
Unless you have a joint mortgage, the house that you share with your live-in partner, even if they have lived there for 20 years or more, could potentially be passed onto your children, parents, siblings or the state, leaving your partner homeless.
Leaving no will can also mean extensive legal costs for your beneficiaries; failing to provide for a partner or dependent will mean they will have to hire legal help to contest the state's decisions, with no guaranteed result. Complex cases can require the hire of a genealogy expert, at great cost, to clarify relatives' rights to your estate.
Julie Hutchison of Standard Life said making a will and keeping it up to date could save family and friends a great deal of distress and, potentially, money, so it should be regarded as a priority.
Aside from the legal implications, there may be personal wishes that cannot be fulfilled without a will. You may not want your children to inherit at 18 – the set inheritance age in intestate law – considering it too young, or you may not want parents or siblings to benefit at the detriment to your spouse.
If you draw up a will, you can specify how long funds must be held in trust for children, to any age you deem appropriate. You may also exclude family members who you don't want to benefit from your estate in a will.
Stepchildren or live-in partners can only inherit part of the deceased's estate if specified in a will, as is the case for friends or charities. You may also want to outline personal wishes, such as funeral arrangements or who should inherit particular property or items of worth.
Drawing up a will also prevents assets being claimed by the state at the cost of loved ones. Ms Hutchison urged people to make sure they had an up to date will. "A will should be part of bread-and-butter financial housekeeping," she said.
"Once you've bought your first property you should draw one up, regardless of your age."
Even if you have made a will, you need to ensure it is updated. Family make-up can change after the birth of a child or the breakdown of a marriage, but if a will is not updated to include or remove beneficiaries, they will have little or no claim to the estate should you die. The late Heath Ledger's daughter Matilda was left out of a will completed before her birth.
Neither, in the event that both you and your spouse dies, will you have any say in who becomes your children's guardian. If your child or children are under the age of 18 it is essential you have a will for this reason. This also applies to a family member or dependant with special needs.
Nearly half of all marriages end in divorce, meaning that not updating your will can have devastating effects for your spouse and any new children or stepchildren. It is also vitally important that family members know where your will is kept and that a duplicate is stored with a solicitor or financial adviser.
Mr Bricknell cautioned: "Many people's estates are administered as if they are intestate, even if they have a will, simply because no one knows where the will is kept."
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