Without a will, your assets may not be passed on to the loved ones you intended, which could greatly affect your legacy. Shockingly, two-thirds of UK adults don’t have a will, making legacy wills and estate planning is crucial to ensure your wishes are followed and your legacy is protected.
A will is a key part of legacy wills and estate planning, helping ensure your assets are distributed according to your intentions. So, what happens if you don’t have one in place?
If you pass away without a valid will, known as dying “intestate,” your estate will be distributed according to intestacy rules, which may not align with your wishes.
In England and Wales, if you’re married without children, your spouse or civil partner inherits everything. If you’re married with children, they will receive:
- Your personal possessions,
- The first £322,000 of your estate, and
- Half of the remaining estate, with the other half divided equally among your children.
If you’re unmarried with children, your entire estate would be split equally between them.
These rules highlight the importance of legacy wills and estate planning to ensure your assets are distributed according to your wishes.
If you’re not married and don’t have any children, your estate would be shared equally among one of the following groups of people in this order:
- Parents
- Siblings, or nieces or nephews if your siblings have passed away
- Grandparents
- Aunts and uncles.
Finally, if no living relative can be found, your estate will pass to the Crown. Most of these funds go to the Treasury. According to the BBC, as of November 2023, there were more than 6,000 people on the government’s list of unclaimed estates.
As you can see, intestacy rules might result in some family members or friends you wish to benefit from your estate being overlooked. It’s not just about financial assets—sentimental items, such as a piece of jewellery for your granddaughter or a cherished record collection for a music-loving nephew, could also be passed on according to your wishes.
Intestacy rules also don’t take into account any desire to leave part of your estate to charities or organisations you want to support.
By not writing a will, you miss the chance to clearly specify who you want to inherit from your estate, ensuring your wishes are fully respected.
Despite this potential impact on your legacy, research from the IRN Legal Wills and Probate Consumer report suggests just 36% of UK adults have a will.
5 other practical reasons to write your will
Making sure your assets go to the right beneficiaries isn’t the only reason to prioritise writing a will if you haven’t done so yet. Here are five other practical reasons to consider.
1. Appoint a Guardian for Your Children
If you have children under 18 or other dependants, your will allows you to name a guardian in case the worst happens. This person will take full responsibility for your children until they reach adulthood. Without a named guardian, the court will appoint one, which might not be someone you would have chosen.
2. Express Your Funeral Preferences
While funeral instructions in a will aren’t legally binding, they can offer valuable guidance to your loved ones during a difficult time. Planning a funeral while grieving can be overwhelming, and your family may worry about making the “wrong” decisions. By noting your wishes, you can relieve some of that burden. You may also choose to allocate funds in your will to cover funeral expenses.
3. Potentially Reduce Your Inheritance Tax Liability
If your estate exceeds the nil-rate band, which is £325,000 in 2024/25, it may be subject to Inheritance Tax (IHT). However, with a carefully drafted will, you could reduce the amount owed.
For instance, leaving your main home to children or grandchildren usually allows you to apply the residence nil-rate band, which, in 2024/25, increases the tax-free threshold by an additional £175,000.
There are other strategies for reducing IHT as well. If you’d like to explore estate planning options to minimise tax, please get in touch.
4. Choose the Executor of Your Will
The executor is responsible for administering your estate and ensuring your wishes are carried out. This can be a time-consuming and emotionally challenging task for some, so it’s worth carefully considering who would be best suited for the role and naming them as the executor in your will.
You can choose a family member, friend, or a professional executor, such as a solicitor or accountant—especially useful if your estate is complex or substantial.
5. Arrange Care for Your Pets
If you have pets, your will can include instructions for their care, such as who you’d like to look after them. While pets can’t inherit assets, you can set aside money in your will to help cover their care costs for the person you appoint.
Understanding Your Estate Is Crucial When Writing a Will
When preparing to write a will, having a clear understanding of your estate is a valuable starting point. Assessing your assets and considering how their value may change over time can help shape how you wish to pass them on, ensuring your legacy is preserved.
If you’d like to discuss legacy wills and estate planning, including what to include in your will and ways to mitigate a potential IHT bill, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, Inheritance Tax planning, or will writing.
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