Why you should make a will (or why you shouldn’t believe everything you see on TV)
8 March 2021
As part of International Women's Day we have some excellent articles from our experts aimed at helping women know their worth and take ownership of their own affairs when it comes to pensions, wills, powers of attorney and property. In this article, Martha Swann looks at the changing family unit and how you can protect yourself whatever your situation.
In lockdown, I have been making sure that my Netflix and Amazon Prime subscriptions have been particularly well used (other TV subscription services are available!). I am sure we all have, seeing as there is not much else to do whilst we wait for the pandemic to run its course. However, our viewing habits can bring up a particular issue - when we consume a lot of foreign media, it is easy to get their legal framework mixed up with our own – possibly to our detriment.
One assumption made is that there is a concept of "common law" marriage in the UK (there is in some parts of the US – they speak the same language but their legal system is dramatically different from ours). In the UK, if you aren't married or in a civil partnership, your partner has limited automatic entitlement to your assets if you were to die.
The changing family unit
According to the Office of National Statistics (the "ONS"):
- Cohabiting couples is the fastest growing family unit in the UK. There has been an increase in 25.8% in over a decade
- There were 2.9 million lone parent families in 2019
- The number of people living alone has increased by 20% in the past 20 years
This clearly demonstrates that the traditional view of a nuclear family is shifting and the landscape now looks very different. The law moves at a slower pace to keep up with these sorts of developments, so it is important therefore to check that you are looking after yourself, your partner and your children should you die unexpectedly. The best way to do this is by making a will.
Statistically, women are far less likely to have a will in place than men – maybe we do not see the value, or maybe we just assume things will all be fine (see above re common law marriage!) or maybe we just keep putting it off. Women these days are far wealthier, earning far more than their mothers and grandmothers (and there is a rise in cases where women earn more than their partners) have much more financial freedom and independence. So we need to make sure that the fruits of our labours goes to the right people if we were to die unexpectedly. Yes, it's a boring bit of life admin, but having a legal document in place outlining your wishes can assist greatly in minimising stress, cost and anxiety to your family during a traumatic time.
Without a will the laws of intestacy will apply to the assets you own – this is essentially the default option and is the legal equivalent of letting the supermarket choose what food you are going to get in your delivery. Not great – you will rarely end up with what you actually want (we've all heard the urban myth of someone getting tulip bulbs instead of onions, but I digress).
In summary, the intestacy rules are:
If you are married:
- If your estate is worth less than £250,000 then it will all go to your spouse
- If your estate if worth more than £250,000 then all your personal effects, the first £250,000 and half the remaining net balance goes to your spouse, with the other half going equally between your children (once they are 18)
If you are not married:
- Your partner is not entitled to anything from your estate (unless you own things jointly – but not always! There is more than one way of owning things jointly, so do not assume they will inherit things automatically)
- If you have children, all your assets go to them (again, they will be entitled to them at the age of 18)
- If you do not have children, your assets will be split equally between your surviving parents
- If no parents survive, then your assets will be divided in order (moving to the next category if there is no one in the previous category who can inherit), first between your surviving siblings, then half siblings, grandparents, uncles/aunts, cousins and ultimately The Crown. This is where the heir hunter companies like to come in and find distant relatives to inherit where no one can be found
If you are not married but living together, you are not automatically entitled to your partner's assets if you die. This may ring alarm bells – and it should! You or your partner may have to engage in an expensive legal process under the Inheritance (Provision for Family and Dependants) Act 1975 in order to get a share of the estate (ie, your assets when you die).
Additionally, if you have children under the age of 18, you need to make sure you have named guardians should anything have happened to both you and your partner. Following a traumatic loss, children need to know they will be looked after.
A will allows you to state who the guardians of your children should be (if you are the only parent, this is even more important);
Children inherit automatically at 18 unless a will says otherwise. Not all eighteen year olds are financially savvy enough to deal with a large lump sum landing in their bank account so make sure you are protecting their inheritance for them by delaying when they may receive it themselves (this does not mean they will not be allowed access to it – you choose Trustees to help them who can then release money for things like education, maintenance and welfare)
Separation and remarriage
Where a couple divorce and they have wills in place then any clauses relating to the former spouse treat that spouse as having died, ie the will is not revoked in full. As such, you need to check whether or not this will still reflect your wishes. It is also advisable to review your will before a divorce is finalised in case anything happens to you in the meantime.
Where a person marries or remarries then any previous wills are automatically revoked (ie they no longer apply) in full and until a new will is made the intestacy rules reapply. So, as romantic a notion as drafting a will up is whilst organising a wedding, it is important to consider including this in your planning process. This is particularly important if you have children from a previous relationship and you want them to inherit or indeed if you have other dependents that you may want to support.
If you are single and have assets, you still want to make sure they go to the right people and this may well include friends rather than just family. A will is especially important if you have estranged parents or siblings and you do not want them to inherit by default.
Every circumstance is different, but a will is a very simple way of making sure your wishes are set in stone, to ensure your partner and children are looked after, and your assets go to the beneficiaries you choose, not just who is conveniently related to you and still alive.
We can assist you in providing personalised advice and drafting a will which achieves your aims so that this can be another To Do ticked off your list. Please do get in touch so we can discuss this with you.