Many people procrastinate about making a will,
but if you should happen to die without having one in place, your estate and assets may be distributed in ways that you would not expect. If you have debts left when you pass away, your estate and all of your assets will go towards paying off your debts before it is distributed to the family. Your surviving partner could get less than what he or she is supposed to get, and money may go to family members who really do not need it.
What are the financial reasons for making a will?
- You decide how your assets are distributed and not the law.
- Your will ensures that your partner - civil or married - will inherit what you leave them and that they are provided for.
- You can decide whether or not you wish to leave an ex-partner something when you pass away.
- You can make sure that your estate does not pay more Inheritance Tax than is necessary
If you do have a will in place, the law will determine how your assets and property is distributed depending on your personal circumstances. Your estate will be allocated in the following way in England and Wales only:
There are even rules on how civil partnerships
- If you are married or in a civil partnership with an estate worth £125,000 or less, everything goes to your partner.
- If you are married or in a civil partnership and your estate is worth over £125,000 your partner will inherit all of your personal items such as household items and cars but nothing that has been used for business purposes, a life interest in half of the rest of the estate, and £125,000 free of tax or £200,000 free of tax if there are no children. The rest of the estate breaks down this way:
- Children or grandchildren get an equal share
- Surviving parents if there are no children or grandchildren
- Brothers and sisters who shared the same two parents if there are no children, grandchildren, or surviving parents
- The surviving spouse or civil partner if there are none of the above
- where you and another person are together in a relationship without the benefit of marriage - are handled. If you do not have a will in place specifying what they are to get from your estate, then they will not get anything at all. You must provide for your partner or else they will be required to make a claim to your property under the Inheritance (Provisions for Family and Dependants) Act of 1975. If there is no surviving partner or spouse, your estate will go to your children or grandchildren in equal shares followed by your parents and so on.
If you want to make sure that someone in your family gets a specific amount of money, you can put a clause into your will that passes the inheritance into a trust fund for that person once the estate is finalised. This is a great way to make sure that younger children are provided for as they get older.