Everyone should have a Will that sets out how their possessions, assets and savings will be distributed upon their death. If you don’t make a Will, this can lead to disagreements and bitterness after your death, adding to the stress of your loved ones during a difficult time. Those who you care about may also miss out on funds that they desperately need to get by – including unmarried partners, close friends, carers or relations by marriage who you would have otherwise wanted to provide for. See our story on Danaë Brook for just one example of the heartbreak that can result from failure to make proper provisions: ‘An unsigned Will left a widow’s life in ruins‘.
Around two thirds of adults in the UK don’t have a Will and one of the main reasons people put off making this valuable document is cost. Many lawyers will charge between £100 and £300 for a basic Will, increasing to £600 or more if complex assets are involved. It is not surprising that DIY wills – which can be downloaded for free from the Internet or purchased from shops such as WH Smith for less than £20 – are such an attractive option. However, if you use such documents without seeking professional legal advice first, things can go badly wrong.
Your Will could be challenged for many different reasons, resulting in a lengthy legal battle, legal bills and unnecessary tax.
According to figures from the CLS, around 38,000 families every year will go through a prolonged probate ordeal as a result of a poorly drafted or ineffective DIY Will. Up to 10% of the value of a person’s estate can be taken up by additional fees caused by an ineffective Will. With the average estate in the UK worth £160,000, this could equate to a bill of around £16,000 in unnecessary fees.
A case study
72 year old Eileen McCormack spent over two years dealing with her cousin George’s estate, having discovered that the document he had been carrying around in his pocket for a number of years was invalid. It was not until his death that a number of errors were discovered.
The document included hand written amendments, made in different coloured inks, changing around who would inherit what several times. The Will was not witnessed – and neither were all of the subsequent changes.
When Eileen contacted a lawyer to help, she quickly discovered that the Will was not valid. Subsequently the lawyer charged her 16% of George’s £98,000 estate – a bill of almost £16,000 – that could otherwise have been avoided.
Eileen told the Guardian:
This has made the whole process very stressful for those left behind. It’s also very sad because George put a lot of thought into how his estate would be distributed in the event of his death. He wouldn’t have wanted this.
Simple ‘Mirror Wills’ – not so simple
Of concern, one lawyer who the Guardian approached for comment told the newspaper that making a DIY Will without seeking any legal advice would be suitable in some circumstances – for example, when a married couple simply want to leave everything to each other. Sadly, April King Legal’s lawyers are all too familiar with these ‘Mirror Wills’ which can lead to most of the estate being taken for care fees.
A lot of people are still unaware that if they need care in later life, their assets will be means-tested by the Local Authority to help pay for these services. The Local Authority will look to use the assets of a person until they get down to a lower limit of £14,250, when the Local Authority will take over the fees. Our clients tell us, ‘We’ve worked hard all our lives, why should the Local Authority get it all?’
The solution is for couples to simply not leave everything to each other in the first place. Instead, they can leave half of the house in trust to their children, stating that they can’t have it while their partner is still alive. We call these Property Trust Wills. Then, if their partner needs care in later life after their death, they will only be means tested on their own half of the house – the other half is safe.
But the important factor is that couples need to act in advance. Once one party dies or loses mental capacity, through a stroke for example, then they are no longer in a position to do this legitimate and straightforward type of planning. It is therefore important for couples to act now even if they may not foresee care fees being an issue.”
You can read Paul’s guidance on protecting your assets from care cost fees in our free information pack here.
The Citizen’s Advice Bureau agree that it is generally advisable to obtain legal advice.
Chief Executive Gillian Guy notes:
When wills go wrong, people may lose their only source of income, property is left in limbo, and the financial and emotional cost of dealing with the fallout can be huge.
Head of Communications at Chase de Vere Patrick Connolly notes that using a DIY Will without any advice can easily prove to be a false economy. He says:
This is particularly the case if you aren’t married to your partner, if you and your partner have children from previous relationships, if you are looking to split properties, if you own a business, have overseas assets, or are concerned about inheritance tax.”
Common problems with DIY Wills
Common problems with DIY Wills relate to how the document is executed – such as not getting the Will witnessed properly, clerical errors or failure to sign the document properly. These are explained in more detail in our article “I’ve been left out of a Will!”.
Problems also occur when your circumstances change. For example, many people are surprised to learn that typically your Will is revoked automatically when you get married, unless the Will has been drafted in contemplation of marriage to a particular person. People are even more surprised to learn that divorce does not revoke a will – instead, the divorced spouse is treated as if they had died, which may have unintended consequences. See ‘Do I need to change my Will?’ which explains more of the life events that can affect your Will.
If your Will is found to be invalid, the laws of intestacy will apply and these can have unexpected results – see ‘What happens if I die without a Will?’.
Wills – complex cases
Sometimes cases are far more complex than the person making the Will realises.
For example, if the person makes a Will in the UK to deal with their UK assets and then makes a Will in another country to deal with their foreign assets, the second Will will revoke the first, unless it expressly states otherwise – even if it does not mention the UK assets. In these circumstances, UK and foreign legal advisors should agree on a joint approach.
Where the person has assets in another country, they should be aware that the law relating to how estates are handled differs from one country to the next. France, for example, has ‘forced heirship’ which requires a fixed percentage of assets to pass to a spouse, child or other relative. Foreign law can take precedence over what is contained in an English Will if the person has foreign connections – and consequently the assets held abroad may not be distributed as they intended. This can be avoided with professional advice and planning.
Digital assets – which might include money held in Paypal, Bitcoin or eBay accounts, or intellectual property rights such as blogs – can also cause complexity. These do form part of your estate and can pass under your Will. Assets used under license such as an iTunes account are not strictly assets. Apple will usually delete a user’s account once notified of their death, but their family sharing’ facility allows users to nominate others to share purchases.
Inheritance tax is another area that is often not considered where a DIY Will is used. Each person has a £325,000 allowance, known as the Nil Rate Band. If all of your property is passed to your spouse or civil partner, they will also inherit your unused allowance. From April 2017, the Government has planned to introduce an additional nil-rate band which relates to a person’s home. By 2021, this could be worth an extra £175,000 per person (giving a joint allowance of £1 million for couples, if the family home is included). See our article ‘The Residence Nil-Rate Band (RNRB) – pitfalls and problems’ for more information. However, as noted above, leaving all your assets to your partner can put them at risk of being taken by care fees.
Finally, challenges to Wills are worth mentioning once again. Aside from challenges on technical grounds, if a disgruntled relative believes you should have provided for them, they may be able to make a claim under the Inheritance Act (Provision for Family and Dependents) 1975. Although these claims cannot be avoided, an experienced lawyer will be able to advise you on how to mitigate them. This might include leaving a confidential letter of wishes to executors setting out the reasons why certain family members have been excluded. Although not binding, a letter of wishes can be helpful to a Court faced with such a claim. See our article “I’ve been left out of a Will!” for full details on how Inheritance Act claims are handled.
If you want to make a DIY Will, always seek legal advice first. We offer an initial free chat without any obligation – we have locations across the UK, and we also offer home visits where this is more convenient.