If you’ve got a Will, you’re in a better position than fifty-nine per cent of the UK population, according to research in 2020 from Canada Life. 31 million people in the UK have not specified who should receive their property and assets when they die.
As you might imagine, older members of the population are more likely to have a Will, but younger people shouldn’t be complacent about their finances, or that of their spouse, even if they’re married or they think everything is fine.
If you have a Will, check it is up to date
Clive Barwell, Wren Sterling’s Head of Later Life Advice has a few tricks for concentrating the minds of his clients when discussing their estate plans.
“I always ask for a copy of the existing Will, read it aloud and ask the clients to tell me what they think is going to happen after the first and second deaths.
“The most common challenge is in relation to the choice of Executors because the Will was often done when the children were young, so sisters, brothers and/or best friends are the Executors, whereas they often need someone from a younger generation. It’s logical that with the passing of time, some of those people might not be around or in the right mental state to carry out their duties, while there might have been disagreements or significant increases or decreases in wealth to consider.”
Then there’s the discussion about tax, care and making sure administering probate is as straight forward as possible.
Clive adds: “It’s really important that everyone is clear on what happens in the event of the survivor needing care, when, with standard mirror Wills, the survivor has inherited everything, so the whole lot is at risk of being swallowed up by care costs. Inheritance Tax is “only” 40%; care costs can be 100%. It’s this point where it is vital to involve future generations in planning and making sure estates are structured correctly and reviewed regularly.”
Why Wills, life insurance and death benefit nomination forms are vital
A story recently appeared in the Daily Mail about a lady called Alex who became a widow suddenly at the age of 34. She was married and presumed that her marriage would protect her financially in case anything bad happened. She was married and had moved into a flat with her husband, Nic, which he owned.
Apparently, Nic didn’t like to talk about money, didn’t have life insurance or a Will and hadn’t talked about what he wanted to happen. After he died suddenly of a pulmonary embolism (a blood clot that travelled from his legs into his lungs), it transpired that a written agreement existed between Nic and his dad, whereby he paid his dad rent on a deposit provided for the flat and the deposit would be repaid from the sale of the flat if anything should happen to Nic.
Nic had also not updated his workplace pension death beneficiary since he started and he still had his mum as the named beneficiary, rather than his wife. Alex was left in a difficult financial position at a time of extreme emotional distress, which is probably the last thing Nic would have wanted.
Alex couldn’t afford the mortgage repayments, so she had no choice but to sell the flat several months later. Nic’s pension scheme trustees did split his pension between Alex and her mother-in-law, as they saw he had not updated it since his marriage. While this situation isn’t unusual, there is no guarantee that the trustees will pay the pension or life insurance in a way that those left behind want, without a Will in place.
So, if you have children, nieces, nephews, family friends who might not have a Will in place, a story like this might be exactly the type of reminder to jolt them into action.