Alan Eccles is a Partner with Scottish law firm BKF & Co. He advises individuals and families on succession planning as well as specialising in charities, third sector and philanthropy. In our new blog he explains why it's absolutely vital to tick off something from life’s to-do list by making a will.
Creating a long-lasting legacy by making a will
Writing a will sounds boring and dull. Ghoulish even. Did you know that only about 40% of adults in the UK have a will? Did you also know that 100% of people in the UK will die? Everyone should have a will. Making a will is an important piece of life admin. But it is much more than that. It is a way to help provide and care for loved ones, protect beneficiaries, secure valuable family wealth, make the process easier for your family after you’ve gone and to support chosen causes.
Some say “I don’t need a will”
Some people think they don’t need a will, thinking “I only have a home” or “It will all go to my husband, doesn’t it?” or “My children are too young to inherit, so it can’t go straight to them.”
Whatever the level of wealth, a will is a good idea; in fact it is essential. Whether you have a small estate, big estate, vast estate or medium-sized estate, all benefit from a will. Making it clear who is to inherit and on what basis.
A will helps you take control of what happens with your estate. By not having a will you are leaving to chance how your entire hard-earned wealth is to be inherited. The laws of intestacy will apply, and they do not always provide the outcome you would want or expect. And these rules can change.
Avoiding surprises
A will gives greater control and means your loved ones will have greater certainty. It will be clear who is to inherit, rather than the ‘lottery’ that can be the intestacy rules. A will minimises the surprises that can crop up giving your family certainty at a difficult time, which is invaluable. Adding financial worries to grief could be very damaging and unsettling. The laws of intestacy can create unexpected results which can cause financial worries and concerns for your loved ones.
The intestacy rules can end up giving more of an estate to a five-year-old child than to a spouse. A child could have greater financial power than their parent. That can cause worry. The law would like to give your estate to the brother you hate over the partner you love. And your partner can only inherit by raising a court action - very much to be avoided. If your estate might be going to your brother rather than your partner – will your partner be adequately provided for from what is left? All of these concerns can be solved with a will.
As noted, the law likes to benefit children. It does that without any real ‘guardrails’. At best, there is a management until age 16. After that, the child is in control of the inheritance. A will allows you to set out the management structure to protect assets for children until a sensible age or stage in their life.
Choosing the decision-makers: executors and guardians
During your own life, you can make decisions. A will empowers you to select those trusted to make decisions after your death. In particular, choosing executors and guardians. Executors are charged with the administration of your estate. In some cases, this can be a longer-term role where there are younger or vulnerable beneficiaries who would benefit from longer-term support and management of their inheritance.
The selection of guardians avoids a decision vacuum for supporting children. That could cover financial matters but also important points such as welfare and education.
No will - the process is more difficult
Having extra bureaucracy following a death is unlikely to be desired by anyone. No one is ever saying “more delay and forms please”. Where there is no will, there is more process involved.
There will be the need to apply to the court to have an executor appointed - not necessary where there is a will in place.
A ‘bond of caution’ is required where there is no will. That is an insurance contract. The premium will be based on the size of the estate. A will avoids the need for this.
As well as some extra processes, there are added timescales involved where no will has been made.
The lack of guardrails for inheritance held for children under 16 was mentioned earlier. Where funds are held for younger children, there may be the need to involve a government body in the decision-making process about those assets. More bureaucracy, time and cost.
A will makes a difficult situation a bit easier by streamlining the process.
Leaving a lasting legacy - support for charity
A will is also a way to express support for a chosen cause. That can, of course, include supporting a previous academic institution. A gift in a will allows you to put a stamp on your giving. You can state which charity is to benefit. You could also indicate how you would wish a gift to be used. Examples could be a gift to support research in a particular area or to support the next generation gain access to learning and opportunities.
A legacy to charity is also something the taxman likes. In the UK, gifts to charities are inheritance tax free. HMRC provides an additional bonus where 10% or more of an estate passes to charity. In that situation, the inheritance tax paid by the rest of the estate drops from 40% to 36%.
Gifts to charities in wills can be made with any assets - shares, cash, property or anything can be gifted and qualify as a charitable legacy.
Making a will is simple
The matters covered in a will might not always be simple but they will be important. But the process of making a will should not be a barrier. It should not take too long to start the process. It can be done in a way that suits you – an in-person meeting or Zoom. It is a formal document but getting it prepared does not need to be a solemn and daunting experience.
If you make a will, you will have ticked off something from life’s to-do list. You will also have made life easier for your family and loved ones when you are not here. You might also become part of something that lasts when you make a gift to charity in your will.
ENDS
The University of Aberdeen has partnered with Bequeathed to offer an exclusive free will writing service in the UK for staff, alumni and supporters. You can find out more about the Bequeathed free will writing service here.
