Avoid heartache, family fights, and business breakdown. Write a will during Free Wills Month

Victorian laws and modern life clash, blowing huge holes in our financial affairs

Leave a legacy to some of the UK's leading charities, such as the Royal National Lifeboat Institution (Getty)

We risk sky high taxation, money going to the ‘wrong’ people, and even business collapse. But most of us still don’t have a will. The idea of having one hasn’t even occurred to one in ten of us. And why would it? Most of us assume that everything we own will automatically go to the spouse and then the kids. For every other circumstance there’s the hazy but persistent notion of “common law”.

In fact, dying without a will, known as dying “intestate”, means different things depending on which country of the UK you live in. But everywhere the notion of common law husbands or wives is roundly ignored, regardless of the fact that cohabiting couples now outnumber those who are married or in a civil partnership.

It may be archaic, but as things stand you may have been living together for decades, but without that certificate, your partner won’t be entitled to a thing if you pass away intestate. Instead, your possessions and assets will transfer to your legal next of kin, including any children, siblings or parents.

Meanwhile, if you are married, it will all go to your partner. Your children and other family, friends, or causes close to your heart may get nothing – again, depending on where in the UK you live. And if you marry or remarry, that process revokes any previous wills. So if you had made specific provisions in your will – to support children from a previous marriage for example – these would be ignored and your latest spouse would receive the bulk of the estate.

Unsurprisingly, it is far from unheard of for parents to sue children and vice versa, for assets of a deceased relative who hasn’t made their intentions clear. Plus, if you haven’t planned, there’s the unsavoury risk of inheritance tax gobbling up 40 per cent of everything over the value of £325,000 that the deceased person has spent a lifetime building up after other taxes have already been deducted once. (The rate, incidentally, hasn’t changed since 2009.) And if you have no close relatives, the lot goes to the Crown. Known as Bona Vacantia, it’s the same legislation that applies to buried treasure.

Then there’s the delay that dying intestate causes, including, for the small business owner, the possibility of their hard won enterprise collapsing because no-one else can authorise payments or legally conduct everyday business. That’s a huge risk to us all given that small businesses account for 99.3 per cent of all private sector businesses and employ 15.7m people according to government data.

Its little wonder that this summer the Law Commission, the independent body dealing with law reform, warned that the outdated wills legislation fails to protect the vulnerable and doesn’t allow others to distribute their cherished possessions after they’ve gone.

Victorian laws

“Making a will and passing on your possessions after you’ve died should be straightforward. But the law is unclear, outdated and could even be putting people off altogether,” says law commissioner professor Nick Hopkins. “Even when it’s obvious what someone wanted, if they haven’t followed the strict rules, courts can’t act on it. And conditions which affect decision-making – like dementia – aren’t properly accounted for in the law. That’s not right and we want an overhaul to bring the law into the modern world. Our provisional proposals will not only clarify things legally, but will also help to give greater effect to people’s last wishes.”

Certain procedures must be followed in order for a will to be valid. But if the formal rules aren’t followed –even when it’s clear what someone’s intentions were – people’s dying wishes aren’t acted on. Wills are also only valid if the person writing it understands what they are doing – however the law uses a Victorian test which takes no account of modern medical understanding.

“It focuses on “delusions” of the mind; doesn’t reflect the understanding of conditions like dementia where mental capacity can be changeable; and differs from the modern test for capacity in other areas of decision-making – the Mental Capacity Act 2005,” the Commission warned, as it launched a public consultation on wills that runs until November. But reform takes time and with half a million people dying every year in England alone, time is of the essence.

Help, however, is at hand this October – for free if you’re over 55 – as the annual campaign to encourage more of us to clarify our wishes gets under way during Free Wills Month. It’s a nice little scheme that brings together registered solicitors who will complete the paperwork for free and clients encouraged (but not obliged) to include a gift to a panel of charities in their will in return.

With most charities dependent on legacies for their income, the big names backing the scheme include the British Heart Foundation, the RNLI, the NSPCC, Oxfam and Great Ormond Street.

How it works

Anyone aged over 55, or in the case of a couple making ‘mirror’ wills, at least one partner aged 55 or older, can contact one of the firms of solicitors taking part in a Free Wills Month campaign during this month to request an appointment.

The solicitor will help to draw up a Will that accurately reflects the wishes of the individual or couple. Those taking up the offer are under no obligation to leave a gift to one of the Free Wills Month charities, “However, we earnestly hope that many will see this as a chance to help their favourite cause,” the scheme adds.

Things to consider

Ian Lane, private client lawyer at Hodge Jones and Allen, suggests there are five key considerations when planning your will:

1. Think carefully about your executors

When you go to your solicitor be sure to have thought carefully about who you want to appoint as your executor. You can have more than one executor but no more than four. Upon your death, they are legally responsible for distributing your estate in accordance with the terms of your will. Beneficiaries of your will can also be executors.

Handling the full administration of someone’s estate can be time-consuming and can take months or even years, so you should ensure you have spoken to the individual(s) about this, making sure they understand what is involved. When you go to see your solicitor to make your will, be sure to take the full name(s) and addresses of your executors with you. Once your will is written, you should also make sure you tell your executor where the will is stored.

2. Consider your children

Any individual may appoint guardians of their minor children (that is to say children under the age of 18) in a will. This is a very useful authority and is often the driving force behind the making of a will. You can be assured that your children will be looked after by the person or persons you most trust with that responsibility

3. Know the value of your estate

Be clear about the total value of your estate. Write down the value of all your major assets including: your home (or your share in it), other property or land, cars and other vehicles, items of particular value, such as jewellery or art, savings and shares, life insurance and pensions.

4. Who will benefit?

You will need to provide your solicitor with the full names and addresses of anyone you wish to benefit from your estate - often called the residuary estate - once any liabilities have been paid and after any specific gifts of property or money have been given to the intended beneficiaries.

If you want to gift money or specific items to people, you will need to list the items or amounts and provide the name and addresses of the beneficiaries.

5. Be tax aware

The government raked in £4.9bn in inheritance tax in the year end to April – up 4 per cent a modest increase compared with last year’s 22 per cent increase but still showing an upward trend. The threshold for paying inheritance tax is currently set at £325,000 but there are exemptions and reliefs available for certain types of gifts and property. Plus, there is no inheritance tax to pay on gifts left to a spouse, civil partner or UK-registered charity.

There is also the residence nil-rate band, introduced on 6 April 2017 and starting at £100,000 per person that provides additional relief against inheritance tax where your main residence is left to direct descendants, i.e. children, grandchildren step, adopted or foster children.