WillDrive - What Happens If You Don't Leave A Will?
Welcome to WillDrive. This area of YouDrive is all about making your will.
Over 50% of people still don’t make a will and 70% think only old people make wills. Both are really crazy statistics when you think about it.
Why make a will you ask – it is a morbid subject, but let me give you an example – you’re 35, single and have your own home, and dog? If you die, who inherits your house, the contents of your house, your dog? I bet you care.
Imagine you’re a single parent with a second absent parent and you have a vision and plan for your child’s future. Unfortunately you pass away leaving no will and the plan you had still inside your head. What would happen to your child, what about their future? What about the money they inherited from you? What about their desires and education plans? It could be decided by the next of kin, the absent parent. What if that parent lived in a different country a long way away from your child’s family and friends!!!!!!
Making a will isn’t just about the financials of your estate but your wishes. And is more important if your wishes and money are connected.
worldwide – some only exist in certain countries
total money and property that went to the government last year because people didn’t leave a will (Money Advice Service)
randomly from a Lisbon phone directory shared Luis Carlos de Noronha Cabral da Camara’s fortune (Guardian)
is the higher end you should pay a solicitor for a simple will (Money Advice Service)
You REALLY should make a will...
It is really important you make a will.
You may think “I haven’t got anything so why bother?”. Your personal wishes count for a lot – often as much as money.
If you have children, the next of kin might not be the best person to parent your children but you may consider a guardianship or a triangle of guardianship whereby 3 or 4 people decide.
If you have children or pets who need to be looked after when you’re not here, you can set up a trust which provides financial support and you can appoint trustees. Again it does not take long and it gives you peace of mind that if anything goes wrong your wishes are executed.
If you don't make a will - intestacy
Your family might have to pay tax before they can access any of the money from your estate. They might have to sell their own home to pay the government! Can’t believe it? It’s true – click to see an article that will horrify you! You must:
- decide on what happens to your estate when you die
- decide exactly what goes to who
This is important – if you’re living together and not married it’s even more important – see the article.
It will save your family real trouble at a difficult time.
What about trusts?
What is a trust?
A trust is a legal arrangement where you give cash, property or investments to someone else so they can look after them for the benefit of a third person.
So, for example, you could put some of your savings aside in a trust for your children.
There are two important roles in any trust that you need to understand.
- The trustee is the person who owns the assets in the trust. They have the same powers a person would have to buy, sell and invest their own property. It’s the trustees’ job to run the trust and manage the trust property responsibly.
- The beneficiary is the person who the trust is set up for and is usually unable to manage the trust assets for themselves because they are too young or they are not good at managing their own money. The assets held in trust are held for the beneficiary’s benefit.
What do they do?
A trust can be a good way to cut the tax to be paid on your inheritance, but you need professional advice to get it right. Always talk to a solicitor or independent financial advisor.
If you put things into a trust then, provided certain conditions are met, they no longer belong to you. This means that when you die their value normally won’t be counted when your Inheritance Tax bill is worked out.
Instead, the cash, investments or property belong to the trust. In other words, once the property is held in trust, it’s outside anyone’s estate for inheritance tax purposes.
Another potential advantage is that a trust is a way of keeping control and asset protection for the beneficiary; a trust avoids handing over valuable property, cash or investment whilst the beneficiaries are relatively young or vulnerable.
The trustees have a legal duty to look after and manage the trust assets for the person who will benefit from the trust in the end.
When you set up a trust you decide the rules about how it’s managed. For example, you could say that your children will only get access to their trust when they turn 25.
The box below shows some information on using a solicitor or will-writing service for your will, Hover over it and it will switch to show you how you can write your will yourself. Click the button on the back to see YouDrive’s view!
There Are 9 Types Of Will
While we always talk about having ‘a will’, there are in fact 9 different types of will. Some of these types only exist in certain countries, but most are worldwide.
Nuncupative (Non-Culpatory): An oral or dictated will, often limited to sailors or military personnel shortly before their deaths.
Holographic Will: Written in the hand of the testator (the person to whom the will relates).
Self-Proved: In solemn form with affidavits of subscribing witnesses to avoid probate.
Notarial: A will in public form and prepared by a civil law notary.
Mystic: A will that is sealed until death.
Serviceman’s Will: The will of a person in active duty military service, and therefore lacking certain formalities.
Reciprocal/Mirror/Mutual/Husband & Wife Wills: Wills made by two or more parties (usually spouses) that make similar or identical provisions in favour of each other.
Unsolemn Will: A will in which the executor is unnamed.
Will In Solemn Form: A will that is signed by the testator and a witness.
Money Advice Service information on making a will
Three reasons to consider setting up a living trust from Mom and Dad Money
Saga information on trust for beneficiaries in your will
Download the HMRC guide to Inheritance Tax
AFH wealth management have a report ‘An introduction to estate planning’ – download it here
Old Mutual Wealth have a Guide to UK Inheritance Tax and Trusts – download it here