It is well documented that old, so called “traditional” family structures have changed and continue to change. The Office for National Statistics (ONS) has recently estimated that 42% of marriages in England and Wales will end in divorce. However, many of those divorcees, often with children from the first marriage will remarry. In addition, ONS figures suggest that in 2012, 5.9 million people now co-habit rather than marry or enter into a Civil Partnership, double the figure from 1996. Indeed, co-habitation is now the fastest growing family structure.
Against this background, it is surprising to learn that it is estimated that around two thirds of all adults and around one third of adults over the age of 65 still do not have wills. A recent Law Commission Consultation Paper on the subject noted that around a third of all Grants of Representation issued in England and Wales relate to intestate estates (where there is no Will).
The reasons for this are varied. For many, making a Will focuses unduly on their mortality, others feel they are too young or are put off by the perceived cost of having a Will professionally drafted.
Common assumptions about requiring a Will
Those who co-habit may wrongly assume that their partners obtain rights which equate to that of a spouse, making the mistake that they will be assisted by the rules of intestacy applicable to England and Wales and that a Will is not required.
In fact, the intestacy rules will often not assist or produce a result which is entirely contrary to the wishes of the deceased. For example, the rules do not include any benefit at all for a co-habitee. A couple who have lived together for many years may find the benefit of their estates passing to an entirely unsuitable family member.
Even where a couple is married, the position is not straightforward under the intestacy rules. Perhaps somewhat surprisingly a surviving spouse will not necessarily receive all of their spouse’s estate (depending upon the extent of assets owned).
Why you should review your Will
In addition, for those who already have a Will in place, it is imperative that they are kept under review and updated as necessary. This applies especially where an individual finds themselves in changed family circumstances and needs to consider a new balance between beneficiaries; perhaps between a new spouse and children from a previous marriage.
An old Will that doesn’t reflect changed circumstances can have equally bad ramifications as not having a Will at all. Consider, for example, the situation where a co-habitee in a new relationship has a Will leaving everything to a spouse to whom he or she may still be married to but has not lived with for some years.
Conversely, it is worth remembering that entering into a marriage or civil partnership has the effect of revoking any existing Will – unless it is carefully worded making it clear that the Will has been prepared in “contemplation of marriage”.
Whatever your family structure or age there are strong and compelling reasons to have a Will and to keep it under review. This is particularly important to ensure that those you wish to benefit from your estate do so.
Other reasons why you should create or review your Will:
- You can choose your executors – the person or persons who will have legal responsibility for administrating your estate. This is important since the intestacy rules determine that those people who benefit from your estate are also entitled to administer it. Often those people are not suitable for what can be a very involved job.
- When you have children who are minors, you may chose and appoint guardians.
- Within a Will it is possible to introduce trust structures which may assist with tax planning and which can also be useful in protecting young or vulnerable beneficiaries. For example, in the case of children, the intestacy rules will pass benefit automatically at the age of 18. Where this is felt to be too young, a Will allows you to extend the age of benefit or keep the assets within a trust.
- If you have a large estate a well drafted Will enables you to plan around Tax and pass on a greater benefit to your chosen beneficiaries. Remember that the process of instructing a professional to draft your Will should mean that you can obtain advice on the structure of the Will but also the latest tax rules that may apply.
- Personal possessions or gifts of cash; a Will can enable you to make specific bequests to family members, friends or to Charity as gifts of cash or perhaps personal possessions.
Above all, having a Will produces greater certainty for all concerned and in particular, where, for the reasons discussed, reliance upon the intestacy rules is not an option. For co-habitees in particular, the failure to have a Will often results in disappointment and potential hardship for the surviving partner. It may also mean that their only recourse is to consider stressful and expensive legal action against the estate, where a successful result cannot be assured.
This article was first published with Professional Adviser on 24 September: Happy families? Watertight wills for changing circumstances