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This Is Why You Need to Create a Will
The old saying goes that only two things in life are certain – death and taxes – and we like to help our clients reach the best financial position in which to deal with the inevitable. With research showing that more than 60% of adults – or 31 million people in the UK today – don’t have a will at all, it’s clear that many of us are not fully prepared for the event of our death.
And this problem is only growing more prevalent with figures at an all-time high. We must ask ourselves why it is that so many people have decided that drawing up a will should not be on their priority list.
A Lack of Urgency
Many people just don’t see it as an urgent matter, but this couldn’t be further from the truth. None of us is invincible and we need to put plans in place to protect those closest to us and ensure that our wishes are fulfilled in the event of our death, however remote that possibility might seem.
The structure of modern society today means that there are many more “non-traditional” living situations such as stepfamilies where children live with just one biological parent or couples living together without getting married. These are just two groups who are particularly at risk.
Another of the main reasons that so many people don’t have a will is that there are many false beliefs surrounding the issue.
Myth: Only the wealthy need a will.
Reality: Everybody needs a will. If you haven’t set out clear guidelines in a professional, legal format over how you wish your estate to be divided on your death, you risk having it distributed according to intestacy law.
In addition, it’s not only millionaires who feel the impact of inheritance tax; having a valid will makes the entire inheritance process smoother and avoids any further upset at an already-difficult time. You don’t need to be wealthy to have dependents or financial commitments, all of which make the need for a will that much stronger.
Myth: It costs an arm and a leg to create a will.
Reality: A professional financial adviser will offer you the most cost-effective route to drawing up a will with regular reviews to ensure that it remains valid in line with your current situation. Yes, there will inevitably be a cost involved but this is all about risk assessment.
A will should be considered an investment – would you rather spend a small amount of money now and ensure that your assets are divided in the way that you wish? Or would you rather risk your dependents and loved ones losing out on your assets because you didn’t want to make a small investment to secure your wishes and their future?
Myth: Wills are only for old people.
Reality: Forgive us for being blunt, but nobody knows when they are going to die. Intelligent financial planning prepares you and your family for all eventualities and writing a will should be an integral part of this process.
Myth: I don’t need a will to make sure my estate goes to the desired person – it happens automatically.
Reality: You need to explicitly state your wishes in a will as if you are co-habiting or wish to leave your estate to, for example, a family friend or carer, this will not be considered under intestacy law. When it comes to cohabitees, this is one of the most important areas to consider when drawing up a will.
With more and more Brits choosing to live together either without getting married at all or waiting many years to do so, this makes inheritance and division of assets extremely complex. If one partner dies, the surviving partner will only inherit the shared property if it is clearly stated in the deceased partner’s will. Otherwise, it will usually be passed on to their next of kin.
Despite this, only around 25% of co-habiting partners have a will and many have no life cover either which can make things even more complicated for the surviving partner. With long-term cohabiting a more and more popular option, couples need to take matters into their own hands and draw up a will as the law to protect the interests of cohabiting couples has not quite caught up.
Facing up to Reality
Aside from the many myths surrounding wills, there is another key reason people don’t take action – they don’t want to face up to this often-complex matter. Deciding how to divide up your assets can be a difficult process that may also cause friction among family members.
Throw in the prospect of Inheritance Tax and it becomes even more intimidating. But the fact of the matter is, putting off the inevitable is not going to solve anything. Having a will comes with many, many benefits. It is also a valuable risk mitigation tool, alleviating issues of conflict or misdirection of assets after your death.
Getting Started with Later Life Planning
Just like pension, investments and retirement, creating a will should be a key component of your later life planning arrangements. A professional will be able to help you to draw up a will that covers all of your needs and intentions.
An expert will also be able to offer guidance on how best to divide your assets if you’re feeling uncertain about the process. This might include how to distribute your property, business and valuables such as jewellery, cash or your pension pot.
As with any aspect of financial planning, it is essential to have regular reviews to ensure that your will is valid for your current circumstances. Marriage, divorce or illness can all invalidate an existing will so it’s essential to work closely with your financial adviser to ensure that you stay on top of your arrangements.
Either way, make sure that you take action sooner rather than later. This is, after all, a life-changing matter.
For simple planning advice and support, our paralegal will be happy to help. If you require more complex planning, we are happy to recommend a number of trusted professionals that we work with. Just call Vintage Wealth Management on 020 8371 3111 or email email@example.com with your queries.