A New Broom Sweeps CleanJanuary 6, 2014
As 2014 approaches, I am quite sure that many people will be making a whole host of new year resolutions. No doubt there will be lots of diets and gym memberships which will not last until February, but there is one achievable goal which you could consider setting yourself this year- making a will.
The statistics show that only about one third of the population in the UK ever get round to making a will. This is a risky strategy as if you die intestate, that is, without a will, you are relying on the law to decide how your assets should pass on death and this could produce some unexpected results. For example, you might assume that if you die all your assets will pass to your husband or wife absolutely but in fact this is not always the case. Only a proportion of your estate may do so and any balance will be shared between your spouse and your children, even if they are minors. If you have no children then your parents or siblings may have an entitlement. Clearly, this is unlikely to reflect your wishes.
Many people also intend to leave specific gifts or sums of money to friends or charities and such legacies can only be incorporated by a will. Making a will also allows you to choose executors to deal with your estate, and to appoint guardians to take care of your children if you should die whilst they are still minors.
For those with larger or more complex estates, making a will is a key first step in developing a clear succession plan. This is of particular importance if you have concerns about inheritance tax, or if there are other issues which may need to be addressed, such as the best way to deal with business assets or how to provide for beneficiaries who are suffering from a disability and for whom outright gifts may not be appropriate. In such cases, the use of trusts may be desirable and these may be incorporated into your will itself or set up during your lifetime, with assets being transferred into them in the event of your death.
Finally, you should also bear in mind the fact that if you fail to make proper provision for your family or anyone who is financially dependent upon you when you die, then a disappointed beneficiary may be able to bring a claim against your estate. Invariably, the costs of such claims are paid from the estate,resulting in even greater loss to your intended beneficiaries. Careful planning in the first place can help to minimise the risk of such claims arising.
Given the complexities involved it is important that when making a will or undertaking any estate planning youconsult with a specialist solicitor who is ableto advise on all of these key areas and help you to make the best possible will in light of your own particular circumstances.It mightjust be the best decision you make all year.
Michael Graham is Head of the Private Client Department at Cleaver Fulton Rankin and Chair of the Northern Ireland Branch of the Society of Trust & Estate Practitioners