The answer may not be as clear-cut as you might think
Figures show that more than half of UK adults do not have a will, including 53 per cent of adults aged 50-64. So what actually happens to your money is you pass away and have not identified who you want it to go to?
If you die without a will, the distribution of your personal possessions, money, and property – known as your estate – will be dealt with under the rules of intestacy. This is a set of legal rules that dictate who will benefit.
The intestacy rules are rigid and may not reflect your wishes. For example, they make no provision for unmarried partners. The intestacy rules also govern who is entitled to deal with the administration of your estate. In Scotland, unmarried partners can make a claim for a share of the estate, but this is subject to the court’s discretion and there are strict timescales for applying.
Where there is no will, the cost of administering the estate may be significantly higher. In Scotland, it also becomes necessary in most cases to obtain a form of insurance bond, which adds extra expense and time to the process.
Making a will is the only way to ensure your estate passes to your chosen beneficiaries as far as possible. It also enables you to choose your executors, appoint guardians for young children, include cash gifts or gifts of specific items, and detail your funeral wishes. It may be appropriate to include a trust structure in your will to offer a degree of protection for your chosen beneficiaries or to allow flexibility for future generations to use the trusts for their own wealth/tax planning.
Sally Cook, a wills, trust, and estates lawyer at Weightmans, explains why it is important to write a will, yet understands why many don’t: “Not many people want to contemplate writing a Will and the implications of what that means; however, it is important to protect your family and assets by doing so.
“Getting your affairs in order will provide peace of mind that your wishes will be carried out, your loved ones will be appropriately provided for, and any potential family disputes are mitigated. Inheritance tax can also be planned for in advance, allowing you to pass on more to your loved ones.
“Ultimately, a will ensures that your family members receive what you intend them to when you are no longer here. Seeking robust and specialist legal advice to help you write a will is a crucial part of that process.
Donna Brennan, specialist in Scottish succession law at Weightmans, adds: “It is also important to ensure that you take advice in the correct jurisdiction – succession laws in Scotland and the rest of the UK are quite different, so if you are domiciled in Scotland or have assets there, appropriate advice should be taken. At Weightmans, we have experts in both jurisdictions.”
Will my estate automatically pass to my spouse or partner?
It is not automatic that a spouse will inherit the whole of the estate under the intestacy rules. The intestacy rules are constantly subject to change, and the outcomes of dying without a will can be surprising and often unjust. Making a will is the only way to ensure your loved ones are provided for in accordance with your wishes as far as possible.
In Scotland, a spouse/civil partner has certain prior rights on intestacy which can exhaust the estate, but only up to a certain level, which is subject to change.
The intestacy rules do not make any provision for unmarried partners. The best way to ensure a cohabiting partner is provided for is to make a will. As mentioned above, in Scotland, cohabitees can make a claim subject to strict timeframes, but the outcome is by no means guaranteed.
When should i update my will?
As your personal and/or financial circumstances change, you should consider updating your will. Examples include:
- In England, marriage will automatically revoke any will you had in place previously – although this is currently being reviewed by the Law Commission. That is not the case in Scotland, and even more reason why a previous will should be updated to ensure it benefits the intended parties.
- A change in family circumstances, for example, having children or grandchildren.
- Divorce
- Significant changes in your financial situation
It is recommended that you look over your will every three years to assess whether there have been any changes to the law or tax allowances which could affect your Will and wider estate planning.
Can I include my cryptoassets in my will?
Cryptoassets will automatically form part of your estate on death if they are held in your individual name. It is not always necessary for you to specifically include a reference to your crypto assets in your will, but care should be taken to ensure that there are sufficient powers in your will to allow your executors to deal with these assets after your death.
It is also important that you make your professional advisor aware of any cryptoassets you may own so that they can discuss with you what provision you have made for these to be accessed after you die.
