This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult us here at WMM (financial planning in Oxfordshire).
Did you know that nearly half of British adults do not have a will? Moreover, millions admit they would not even know where to start if they were to write one. As a financial planning firm here in Oxfordshire, we recognise on a daily basis how important a will is when it comes to preserving your wealth after you die, and passing it down to loved ones according to your wishes.
Here, our financial planning team at WMM offers this short guide on how a will can affect estate planning. If you’d like to talk through your own retirement and estate strategy, then get in touch to arrange a free, no-commitment consultation:
Call us on: 01869 331469
What happens when you die without a will
A robust, legally-airtight will is the best way to ensure your estate is distributed properly after your death. In essence, it sets out what you would like to happen and confirms this for others involved. Making a will isn’t morbid, it just makes good sense. However, if you die without a will, then it will be divided via the UK’s intestacy rules. In this situation, the deceased is referred to as an “intestate person.”
This might sound fine, but the rules cannot be relied on to honour your wishes. For instance, if (in 2020-21) you have children from a first marriage and later remarry, then your spouse is likely to inherit the first £250,000 when you die, along with your personal property and belongings.
In this case, moreover, your children might only be entitled to a share of your estate if it is valued at over £250,000. However, your spouse is also entitled to half the value of your estate over this figure. So, imagine your estate is worth £500,000 when you die. £250,000 will go to your surviving spouse, along with half of the remaining £250,000 (i.e. £125,000). The amount left (£125,000) could possibly then go to your children.
Unmarried couples & property
What happens if you are in a long term relationship and have lived together for years? In this case, without a will your partner will not inherit anything; even if you have had children together. The same rules apply, incidentally, to previous spouses or civil partners where the relationship has been legally ended.
With regards to jointly-owned property, the rules can be quite complex. If you jointly-own your home with your partner and lack a will when you die, then the inheritance will depend on whether you were “beneficial joint tenancies” or “tenancies in common”. In the former case, the surviving partner can inherit the deceased partner’s share of the property. However, in the latter case, the deceased partner’s share does not automatically pass to the surviving one.
Financial advice & estate planning
Clearly, these intestacy rules provide good reasons to consider crafting a will. However, it’s also a good idea to be strategic and integrate this properly into your long-term financial plan. For instance, how can you minimise unnecessary inheritance tax upon your death, and ensure this is encapsulated within your will? It might be that you wish to leverage a specific trust to pass wealth on to your loved ones when they are older, for a specific purpose (e.g. a house deposit).
If you are interested in starting a conversation about your financial plan, then we’d be happy to help. Get in touch today to arrange a free, no-commitment consultation with a member of our friendly team here at WMM.
Call us on: 01869 331469