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Leaving treasure on earth

21 October 2016

About half of people in Britain do not have a will, including a large number of people with dependent children. Rebecca Paveley considers the implications


Dependant decisions: more than a third of British people with young children have yet to make a will

Dependant decisions: more than a third of British people with young children have yet to make a will

THANKS to his will, David Bowie’s wife and children shared his $100 million, and they followed his writ­ten instructions for his ashes to be scattered after a Buddhist ceremony in Bali. The actor Alan Rickman’s £4-million estate largely passed to his wife, and he left £100,000 to four charities.

But the musician Prince, whose unconfirmed estate dwarfs the others (it is believed to be worth up to $300 million) did not make a will, and, months after his death, his four siblings and half-siblings are still fighting in the courts for a share. A judge has already dismissed numer­ous claims from people claiming to be his children, his wives, and his cousins.

A will would have saved the extra heartache of a legal process for those grieving for him; and yet, like more than half the people in Britain who currently do not have a will, the musician no doubt thought that, at the age of 57, he would have plenty of time to write one.

More and more of us are living for the moment and not wanting to confront the difficult decisions that writing a will can sometimes entail, Sir Alex Elphinston says. He is a senior associate solicitor and chair­man of STEP England and Wales, the professional body for those advising families on trusts and estates.

”People put off making a will sometimes because they don’t want to confront those decisions; their circumstances are too complex; or they know there is no answer that can keep everybody happy,” he says. And yet, because many people are living in families that are more com­plex, or “blended”, owing to divorce, or partnership rather than marriage, a will is more important than ever.

For those who do not make a will and die intestate, any money and other assets left are shared out according to intestacy rules. For those who are married, or in a civil partnership, their spouse inherits the first £250,000 of any assets, and anything left over is divided be­­tween their spouse and any children, equally. If most of the deceased’s assets are tied up in the house — as is the case for many people today — it could mean that a surviving spouse is not able to stay in their home, as it will need to be sold to pay the children’s shares.

For those who are not married, but have a partner and children, the children are entitled to share out the assets, and the partner may inherit nothing. If there is no spouse or civil partner, and there are no children, and parents, siblings, or uncles and aunts have predeceased a person, then the whole estate goes to the Crown. Last year, £8 million passed to the Government in this way, simply because people had not left a will.

Even if the intestacy rules provide for what you would want done, writing a will shows your family that you wanted them to be treated equally, and help to prevent any bad feeling springing up, Sir Alex advises.

He cites a case that led to ill-feeling in a family with four adult children who, after the mother died without leaving a will, were given equal shares of the assets. One of the children, however, had been living at the mother’s home and caring for her, and there was no provision for that child to stay in what was his only home. A simple will, allowing the child to stay in the home for a certain amount of time before it was sold, would have prevented some of the heartache that resulted, Sir Alex says.

It is possible to write your own will, and sign it in the presence of two independent witnesses — who should not be beneficiaries — and that will be legally binding, but the language used in the will is all-important, and it is easy to make slips that mean that what you intended does not come to pass.

Nick Hill, from the independent Money Advice Service, warns: “In theory, you could scribble your will on a piece of scrap paper. As long as it was properly signed, and witnessed by two adult independent witnesses who are present at the time you sign your will, it should be legally binding. But that doesn’t mean it’s a good idea.

”Most wills follow some general rules for what you say and how you say it. These standard ways of writing things are tried and tested, and they remove any confusion about what you mean — even if the language seems unusual at first. Using the wrong wording could mean that your instructions aren’t followed, or even that your will isn’t valid.”

The annual scheme Will Aid runs for the month of November: sol­i­citors waive their usual fee to write a will, in return for a donation to charity. In the past 18 years, Will Aid has raised £16 million for nine charities. The scheme is best suited to people with more straightforward circumstances, although for those with more complex family or financial arrangements, the solicitor may agree to charge an extra fee for work outside the normal service.

A survey this year for Will Aid found that 35 per cent of people who have not written a will have dependent children, and so have not assigned guardians for them should they die. For parents with young children, this can be the most difficult question they have to ask themselves.

The part played by a guardian comes to an end when the youngest child is 18, Sir Alex explains. When choosing who best to look after your children, it is important that you think about the values that are most important to you, and whether the guardians share them.

”The guardians are the ones who will be making the personal dec­isions, so to speak, and so it is important that they have similar values and outlook on life as you do — which could cover a myriad of different matters such as schooling, religious observance, sporting inter­ests, and the like.

”If appointing more than one person, where they do not all live at the same address, it will be important to consider with whom the children will live. If appointing a couple, it will be important to make sure that you consider what hap­pens if they subsequently get di­­vorced, or move away from the area completely.

”If there were to be a challenge about the appointment of a guar­dian, then the courts will, where possible, take into account the wishes of the children them­selves. The older the child is, the more weight is likely to be given to their views.”

Parents who are concerned about providing for young children, or those with a disability who may not be able to look after themselves, will need to set up a trust.

Trusts are created to protect children’s or vulnerable people’s interests in the event of one or both parents dying. There are trusts for children which can allow children to come into their inheritance at 21, or 25, when the trust must come to an end, although trustees can bring the trust to an end earlier, if they believe it is appropriate. These trusts are called 18-25 trusts.

”Allowing a trust to run beyond 18 does carry a small extra tax liability that parents should be aware of,” Sir Alex says. Parents who are happy for their children to inherit absolutely at 18 can create a bereaved-minors trust. Such trusts typically make some allow­ance for the appointed guardians of the children, too, if they might need to move house to accommodate the children.

Trusts can also be used to protect your children’s inheritance, while still providing for your partner or spouse while they remain alive. These are called life-interest trusts. In such a case, a partner would have income to live on during their lifetime, but it would then pass to the children. This could be used, for example, to prevent the money going to a new spouse if he or she were to marry again.

Another trust sometimes used for families is a discretionary trust, where the beneficiaries are named but it is left to trustees to decide how the estate should be divided up, and how much each beneficiary can receive, and when. They can also decide to exclude some benefici­aries. This gives flexibility — and in­­creased respon­sibility — to trustees.

They are useful where the person setting up the trust has identified a group of people whom he or she wishes to benefit — for example, chil­dren — but it is not certain which of them will need financial help in the future, or what help will be required. Sometimes, the person setting up the trust has a main beneficiary in mind, but feels that it is inappropriate to put the money in that person’s control.

Appointing the trustees for any trust is an important decision, and solicitors tend to advise that people other than relatives are appointed as trustees, to minimise the potential for family conflict.

Although wills help to prevent many problems, there is no “bomb-proof” will that will prevent all prob­­­­­­lems, and wills can be contested if they are deemed to be un­­reasonable. Wills must also be regularly updated if they are to remain valid: a new marriage revokes a will, and more children, grandchildren, or a divorce mean that a will has to be updated.

Wills are also challenged when those left behind feel aggrieved, and decide to contest the settlement. Unsurprisingly today, increasing numbers of wills are being chal­lenged, and, in some cases, changes are being made by the courts.

The most recent headline-grabbing challenge to a will is that of Melita Jackson, who left her estate to charity and left nothing for her daughter. The Court of Appeal last year ruled that her daughter should receive the £163,000 that her mother had specified in her will should be left to three animal charities, even though the mother had left a letter to her executors telling them to defend any claim by her daughter against the will.

The Court of Appeal ruled, however, that under the 1975 Inheritance Act the will did not make reasonable financial provision for the claimant. The charities affected said that they were deeply concerned by the ruling, which has now been referred to the House of Lords and faces years more of legal wrangling.

Sir Alex says that, despite chal­lenges, it is better to have a will than not — “but have lots of ‘what if?’ questions in your head when writing it”.

In terms of being liable for inheritance tax on an estate, the current tax-free allowance (called the Nil Band Rate) for inheritance tax is £325,000 per person. Married couples and civil partners are allowed to pass their estate to their spouse tax-free when they die, which means that the surviving spouse can inherit the entire estate without having to pay inheritance tax.

They can also pass on their un­­used tax-free allowance to their spouse. So, if a husband dies and his estate was under £325,000, his wife can take his allowance and add it to her own tax-free allowance. This combined allowance means that, when she dies, her estate will incur inheritance tax only if it is worth more than £650,000.




‘We had to think through all kinds of dreadful scenarios’
Joanna and Michael have two chil­dren, and Michael has a daughter from his first mar­riage. Joanna wrote her will while ex­­pecting their second child


We had bought a house a few years back; so we were starting to actually accumulate capital (as opposed to our young-adult days, when all we accumulated was debt). I was expecting my son, and so would soon have two children, and wanted to make sure they were provided for.

It was slightly more com­plicated, because my husband has an older daughter from a previous marriage. We get on well, and I wanted to include her in my will, but I did want to prioritise our own children, partly because my step-daughter will be well provided for by her mother’s will.

I don’t recall what my hus­band’s will says, but, in the event of his death, everything goes to me. As he is quite a bit older than me, sadly that is the scenario we are ex­­pecting. We did have to think through all kinds of dreadful scenarios, however: both of us dying at the same time but the children still alive; all of us dying at the same time, etc. It wasn’t very pleasant. I identified two nephews as the recipients of my assets, should all of us disappear. How­ever, I remember saying to the lawyer, that, in this event, I wouldn’t much care anyway.

As a guardian, I chose my mother, because she is the family member closest to my children. I did have in mind that a guardian does not necessarily mean that the children live with that person, but, rather, she is responsible for deciding on their welfare. My mother clearly couldn’t cope with actually caring for them day to day. Moreover, she is now into her seventies, and my step-daughter is now well into adulthood; so I am thinking of changing my will to appoint both of them as guardians.

I would also like to leave some money to charity, as there are several I support. I do worry about dividing our assets up, and there being arguments among the chil­dren when we die. I have seen many families split in this way, and I don’t want it to happen to mine.



‘Appointment will force us to decide’
Rebecca and Chris have a two-year-old child. They have an appointment to write their will through the Will Aid scheme, but cannot agree on whom to appoint as a guardian.


DESPITE discussing writing a will a lot, we have always procrastinated up until now. I think if we didn’t have a daughter we still would not even consider it. Although we own our home, I don’t think we would have felt — or do feel — any compulsion to “protect our assets”, and our only real reason for doing a will is to choose guardians for our daughter.

We are both concerned about our daughter’s happiness and comfort, and in minimising the disruptive impact of changes in her life. Of course, if the will was ever required, her life would have already been disrupted, but for that reason we are agreed that we need to choose people who are involved in her life, who are part of our family (not only, or simply, blood relatives), who know our lifestyle and wishes for our daughter, and would bring her up in the same fashion.

Most of our close family, and many of our friends, are part of our church community, and it is important to us that our daughter remains part of that if we are no longer around. I can’t bear think­ing of her as a tag-along to an­­other family, or without the sup­port and community she is part of now.

That agreed, however, it is prov­ing a difficult subject for us to tackle, because so far we have been unable to agree which of our family mem­bers our daughter should go to, if we both were to die at the same time.

We liked the idea of Will Aid month, and that the money will go to charity. Having an appointment booked is going to force us to come to a decision. Without it, I think we’d procrastinate for ever.



‘We wanted to get everything in place’
The birth of their daughter made Hannah and Rab get a will. Unusually, perhaps, they also made provision for power of attorney


We made a will after the birth of our child. Because we both own a property separately, and because Rab has grown-up children, our wills were a bit more complex then some.

I am very fond of my step-daughters — as people in their own right, as well as very loving sisters to my little girl — but, personally, I don’t have financial responsibility for them. Similarly, if anything happened to my husband, I don’t want them to have to wait until I die to realise their inheritance from him. So our wills had to reflect both of these situations. The solicitor we saw was very good at working out all the permutations of who could pre-decease who, based on our general wishes.

As our daughter is very young, we wanted to specify guardians. It might be a little unorthodox, but, instead of choosing one specific person or family, we have named my mum, and my brother and sister. They would work out between them where she would live, but it helps that my mum and brother both live on the family farm, which would give her an obvious home. Also, it would mean that she would stay relatively near my husband’s parents, and be conveniently placed for other members of his family to be involved.

The most important thing for us is that our daughter would be raised in a home that would allow her to live out her faith, in whatever form that might take. That would be the case with both our families.

We wanted to get everything in place. I know of friends who have had a difficult time with establishing power of attorney for elderly parents, or who have suddenly been faced with making life-changing decisions, with no clear idea of the wishes of the people they love. So, while setting up our will we have also established who would be responsible for our finances, and welfare, should either of us not be able to.

Several people have commented that it seems a bit early to be doing that, but it is easier for us to sort it out now than to leave it to our relations to try and do it for us later.

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