The reason to make a will is to control how your estate is divided. But it isn’t just about money.
Your will is also the document in which you appoint guardians to look after your children or your dependents.
The place to start is to look at what happens if you don’t make a valid will (in legal terminology, if you die intestate).
Two administrators are appointed by the Probate Registry, a division of the High Court, to wind up your estate. They have the same function as executors (people you appoint to wind up your affairs), but they are appointed by the Court.
Any person may apply to be appointed as an administrator. To be appointed, an application must be made to the Probate Registry. Occasionally more than one person or one set of people apply. In that case a judge must decide who has priority. Generally it is clear from the relationships of individual people who has the best qualification.
Why Make a Will.
Coming back to the central question of why make a will, the reason is to (as far as possible) override the law that defaults if you die intestate. Reasons why you might want to do this are:
So as not to give your estate to an estranged husband or wife
Your surviving spouse comes top of the list of beneficiaries if you leave no will. So, if your marriage has broken down but no divorce has been finalised, your surviving spouse (now your ‘ex’) might inherit the whole or a share of your estate.
So as not to ignore your unmarried life partner
If you live with someone with whom you are not married nor in a formal civil partnership, and you die intestate, your life partner has no automatic right to inherit anything from you.
To allow your spouse or partner to keep living in your home
If your home makes up a high proportion of the value of your estate, your surviving spouse or life partner might be compelled to sell it to fund payments for tax or your bequests to children or other relatives.
To avoid paying more tax than necessary
Do you really want to give your money to the state?
At the time of writing this article, inheritance tax kicks in at £325,000. That includes gifts you have made in the seven years before your death.
The fact is that if you own your own house, and have a mortgage protection, endowment or life policy, and you are contributing to a pension, you could well find that under intestacy, your estate may well pay IHT on much of what you leave.
You probably know that what your spouse or civil partner (but not an unmarried partner) inherits from you is free from inheritance tax on your death, but in the longer term that is of no help. When he or she dies, the value will just make his or her estate even larger.
To control who doesn’t receive your estate
It can be easy to disinherit the people about whom you care the most, or who need your estate the most.
If you die intestate while you are married, your estate passes to your spouse. If he or she remarries, then dies intestate, his or her estate (which would include yours) would pass to his second wife or her second husband.
He or she might leave the estate to children (all from his or her first marriage to someone else). The remainder of your estate would be inherited by the children of someone you may have never met.
The only way to ensure that certain people receive certain gifts (particularly ones with sentimental value), is to create a will or gift the items well before you die.
To nominate who will look after any young children
This important issue cannot be covered entirely in your will, of course.
Ideally, you should consult with friends and relatives and obtain their acceptance of whatever decision seems best for your family. Your will remains the best place to record this.
Suppose both parents die in the same accident. Without this record, your children could be brought up by people you consider quite unsuitable, or even taken into care.
If you are an unmarried mother, you can appoint a guardian to your children by will. This is important because your children’s father does not necessarily have the legal powers of a parent nor become their guardian.