The rules that revolve around writing a will came into force – in the main – during the Victorian era when will writing became more regulated and had a legal status. However, a review by the Law Commission has concluded that these rules are behind the times, and many of them need to be updated to comply with modern living. The worry is that because these rules don’t seem to match up to how we live today, they could be one of the reasons why many people don’t write a will in the first place.
When you write a will, you must follow specific procedures in order for it to be seen as valid. If the rules that have been put in place are not followed, then your will may not be enforced, even if you have made your final wishes clear.
One of the main issues that the Law Commission found in the old rules around wills was the matter of mental capacity. When the term was created, it didn’t take into account illnesses such as dementia, which is changeable, giving the sufferer good days and bad days. Someone with early onset dementia, for example, may have problems with short term memory, but that does not mean that they do not fully understand what they want to do regarding their will. The law as it stands, however, prevents them from writing a will if they have been diagnosed with the disease, which can be problematic for them and their family, as well as highly frustrating.
Times have changed dramatically, and in this modern world it should be quick and easy to create a will that will be valid and lay out all the testator’s wishes. Electronic wills – something that the Law Commission is recommending become commonplace – will certainly help with this, but updated laws regarding medical issues that we now have a much better understanding off will be a great step forward.
You may have heard the term ‘bona vacantia’ in relation to probate. But what exactly does it mean? In the simplest terms, bona vacantia is a part of the Treasury Solicitor’s department, and it manages unclaimed estates. That could be the estates of individuals, or of companies that are liquidated or wound up. In the eyes of the Treasury department, both of these are treated in the same way, although there are often more assets and account to look at when it comes to a business.
Company directors may not be aware that if they apply for their company to be wound up or liquidated and removed from Companies House, then anything left over can indeed be claimed by the bona vacantia department. Sometimes directors forget about old accounts, for example, and if these are left open when the company has been dissolved then anything left within them can then be claimed by the bona vacantia department. These company assets can include bank accounts, land (in England and Wales), trademarks and copyrights, patents, mortgage benefits, intellectual property, and the benefits of any agreements that have been set up, amongst other things.
And if you realise that these assets have been forgotten about, there is no guarantee that you will get any of it back again. The Treasury Solicitor isn’t set up to correct mistakes or work around any company director’s negligence.
So what happens to the estates once they have been claimed by the bona vacantia department? One option is that they can be bought back by anyone with a claim to them. This is fairly unusual, however – there is a period of research and due diligence that has to take place so that, as far as anyone knows, the estate is not to be left to anyone. The usual option for what happens once the estate is claimed by the bona vacantia department is that it is added to the accounts of the Treasury department.
A personal representative for someone’s estate may be able to step down, although it will depend on a number of factors that should be taken into consideration first. The first question that needs to be asked is whether they have been appointed as an executor, or as an administrator.
If they are an executor, they can choose to step down – except in the case of two exceptions. They can do this even if they initially agree to the task, and this can happen due to a variety of reasons including ill health, another bereavement, or workload. If the executor wishes to step down, they must sign a Deed of Renunciation. This document means that the executor agrees to give up the role and any responsibilities that come with it. The deed is then filed with the Probate Registry and is made final. If the executor changes their mind and does want to take on the role after a Deed of Renunciation has been filed, a court can assess the situation. They cannot simply start carrying out the work without a court having given them permission.
There are two situations in which an executor is not able to step down from the role. The first is when the Grant of Probate has already been issued to the executor. If an executor no longer wishes to perform the role, then they cannot be issued with a Grant of Probate. There is the possibility that the Grant of Probate can be revoked so that the executor can step down, but this would only happen in exceptional circumstances.
The second situation in which an executor cannot step down is if they have ‘intermeddled’ in the estate. This is when the executor has begun and administrative work before the Grant of Probate has been issued.
An administrator is somewhat different to an executor. An administrator is a personal executive who is appointed by the Probate Registry if there are no executors named in a will (or they have died or stepped down), or no will at all. If they don’t want to take up the role, they don’t have to do anything – they simply don’t act. There are no forms to complete and no one to notify.
The need to move a loved one into a care home is an emotional one. And it’s a big decision. But it can sometimes be for the best, depending on the circumstances of the family’s situation. Some people may be reluctant to pursue the idea, even when it is in the best interests of the person in question, because they don’t think that they can afford it, or they think that the person’s house will have to be sold to fund it.
But are they right?
It depends. If you apply for state funding for a place in a care home, then you will need to be assessed. If your capital is under £23,250 then you will be able to gain financial support from your local authority. In order to gain the maximum support, your capital will need to be below £14,250. This means that you will only need to contribute £23.60 towards your personal expenses. For those with capital between £14,250 and £23,250 there will need to be an additional £1 per week paid for every £250 over £14,250 and under £23,250.
If your assets (including your property) are assessed to be worth more than £23,250, then you will be expected to pay for your own care.
State funded care does not mean that you have no choice as to where you go. You can choose anywhere, and it doesn’t even have to be in the county of which you are a resident. As long as the home you choose is suitable for your needs (which will also need to be assessed) then you are free to choose.
If the care home you choose costs more than your local authority will pay, then it is possible for a third party to top them up. This could be a family member, for example. You cannot, however, top up the fees yourself, as your capital has already been assessed.
If it is your partner who needs care, then it will only be their finances that need to be means tested. If you live in a property with your partner then it will not be factored into the calculation. As well as that, only half of any private pension will be used in the calculations. The same is true for joint savings – half will be assessed. To make assessment easier, it is better to have separate accounts.
If your capital is more than £23,250, then you will need to self fund. Whilst you are selling your home (which is often required in order to meet the care home fees), the local authority will pay the fees and then recoup the cost from the proceeds of the house sale.
You do not, however, have to sell your home in some cases. Social Services can actually lend the money that is needed, and charge it against the value of the property. Then, why you die and the property is sold, the money is given back to them from the proceeds. There could be a limit on how much they will pay, however, and it may mean that some benefits are stopped or capped.
Another option is to let your property out, and use the rental money to pay for care. When the property is sold after your death, your family will be able to keep all proceeds.
One of the biggest taboos in British society is to talk about death. Millions of people have a problem doing just that, and talking about any plans made for after someone’s death tops the list of subjects that simply cannot be spoken of.
This is one of the main reasons why so many people simply don’t make a will – around two thirds of the adult population.
A study carried out by NS&I (the agency that runs Premium Bonds) discovered that although many people have looked into care options for elderly or disabled relatives, when it comes to their own deaths or old age, they are far less productive. One third of adults say they have no intention of ever speaking about their own wishes with anyone. It’s just too uncomfortable.
Just over one third of people say they are too young to have to think about a will – although this is probably simply an excuse not to worry about writing one for a little while yet.
Others said that they did not want to write one because they couldn’t afford it, but that as soon as they could afford it, they would get one. Another reason behind not thinking about writing a will was that it would take too much time out of their busy lives.
But not writing a will or discussing your final wishes with your loved ones can actually lead to a lot more distress for them after you have died. The only sure way that anyone will know what you want is if you tell them.
Over the last 12 months, HMRC has collected over £5 billion in inheritance tax. Inheritance tax has never reached this record level in one year before, and the level for this most recent period is 19 percent higher than in the previous year.
Why is this? Why is so much more money being paid in inheritance tax?
The first reason is that although the IHT allowance has been frozen at £325,000 for a number of years now, house prices have continued to rise. This means that more estates than ever are worth more than the allowance. However, this should be combated thanks to the new nil-rate tax band (essentially allowing the estate an extra £100,000 grace if it is being left to a descendent) which came in in April 2017.
There are a number of other ways to reduce your IHT liability. One is to give away your assets so that they are not part of your estate when you die. You can make one gift per year that is worth £3000. Any more than that and inheritance tax will be due. You can choose to make that gift in one lump sum, or you can split it into bundles of £250 at a time. You cannot choose to give small £250 gifts as well as the £3000 gift to the same person, however.
Special dispensation is given for wedding gifts. You can give as much as £5000 to each of your children. The amount reduces to £2500 for grandchildren, and for anyone else it is £1000. Also, if you use your money to support a child in full time education, there will be no IHT due.
It is possible to make other transfers and gifts, but not everything will automatically be exempt – some will have the caveat that you need to live for at least seven years after the gift is given. If you do not, then IHT may be due when you do die.
A man named Stephen Jackson has been found to have stolen almost one million New Zealand dollars from his dying mother. The man actually sold his parents’ house whilst his mother was in the process of writing her will – even though that will said that Ivy Jackson wanted to split the property between her three children. However, by the time she died the house had already been sold and it was too late to do anything about it.
Stephen Jackson then took a further $250,000 from his mother’s bank account after she passed away.
Only one of Mr Jackson’s siblings was living at the time of their mother’s death, and the High Court in New Zealand found in favour of that sibling, Raymond Jackson. It was found that Stephen and his wife Linda owed almost $1.1 million, plus interest, to the estate of his dead mother.
But how could this have happened in the first place?
In January 2014, Ivy Jackson suffered a stroke and was unable to return to her home. Knowing that she was very unwell, she proceeded to write a will which, two days later, was completed. The will stated that she wanted the house to be sold, and for the proceeds from the sale to be shared between her children equally. Everything that was left over would go to Stephen and Linda Jackson.
However, because Stephen had been made power of attorney after his mother’s stroke, he had already made arrangements to sell the house.
Ivy Jackson died one year later after spending 12 months in a nursing home. Stephen said that he had had to sell the house in order to pay for the home (and the payment for it does seem to have come from the proceeds of the house sale). However, Ivy had enough put into savings to pay for these fees without the need to sell the house at that time. And, despite some of the money being used for the care home, almost $600,000 was still unaccounted for when the case went to court.
On top of that, it was discovered that Stephen Jackson used his status as power of attorney to withdraw around $300,000 from a joint account that had been held by his mother and father.
And, although they were both named as executors in Ivy’s will, neither Stephen nor Linda actually executed it, and instead continued to make withdrawals from a variety of different accounts.
The couple did not attend the hearing and they cannot be contacted, although it is thought that they have since moved to Queensland. The case is therefore ongoing.
The Law Society – the body that exists to assist all solicitors – has recently suggested that the probate process (and inheritance tax situation) should be made easier. At the moment, it is a long-winded process that is made harder because of the timing of it; it is done when families are still grieving over the loss of their loved one.
The Law Society has created 22 different and very detailed recommendations about these potential changes in the probate system, and has submitted them to the government. The idea behind the recommendations is to ensure that everyone is treated equally, and to give everyone involved in the process the knowledge and information they need to do what is required quickly and easily. Right now, families often feel rather confused and unsure as to what they are meant to be doing.
It isn’t only the probate system that is confusing; inheritance tax can often worry people as well, even though it doesn’t always need to be part of their grieving process. The chairman of the tax committee of the Law Society, Gavin McGuire, wants more clarity in all of these situations and systems so that no one is left feeling confused whilst also dealing with their grief. A simplified taxation system and probate process would alleviate many of the issues that come with them at the moment. Something else that would also help would be extended times for the work to be done. This would allow for the grieving process to be over (as far as that is ever possible) before work needs to be done.
The need to write a will is always there, but it can make people rather anxious – they don’t like to think about their own deaths, and neither do they want to make a mistake that would make their will invalid when they do pass away. So it is often a job that is put off, and sometimes it simply never gets done.
But there are some hints and tips to write the perfect will – once you have read this list, you should be able to get your will written, tick it off the to do list, and forget all about it (except to tell people where it is kept, of course).
There are a few different options to pick from when it comes to choosing who writes your will. You can do it yourself, you can engage a solicitor, or you can go to a specialist will writer. All of these options will give you a will, and picking the right one for you can depend on your budget as well as how confident you feel in the will writing process.
For example, a DIY will is great for those on a lower budget, but if you are unsure of exactly what you need to do, it may not be an option that you are comfortable with. You will need to weigh up the pros and cons of each different option and make your own decision.
You will need to choose at least one executor for your will. Think about this carefully before simply picking someone out of thin air. It is a very demanding role, there is a lot to be done, and not everyone will be willing to do it. Ask whoever you are thinking of choosing whether they are happy to take on the role before you name them in your will.
The person you choose will need to be responsible and meticulous – not everyone is suited to being a solicitor.
It’s always a good idea to have ‘back up’ executors written into your will. What would happen if your spouse was named as your executor, but you both died in a car accident? You wouldn’t have a living executor to get the work done. This is just one reason (not wanting to carry out the role is another) why having a ‘spare’ executor is a good idea.
If you have children under 18, it is wise to appoint a guardian or guardians for them. Although your partner or spouse may be living when you write your will, there is no guarantee that they will be when you die and the will needs to come into effect. If you both die together, or your partner dies before you and you don’t update your will, your children could be left with no one to look after them. If this happens, the state will appoint guardians, and they may not be the people you would have chosen yourself.
If you are thinking of setting up a trust (if, for example, any of your beneficiaries are under 18, or are unable to make their own decisions, you will need to do this) then you will need to appoint responsible trustees as well. Make sure you choose someone who understands finances where possible, as this will make it much easier for them when the time comes.
Being specific in your will is the best idea. If you want family heirlooms or items that have specific sentimental value (jewellery often falls into this category) to go to someone then make sure you write that information within your will. Otherwise no one will know. Simply telling someone what you are planning will not be enough.
If you are doing as you should and being specific, make sure that the residual of your estate is also accounted for. If, after your specific legacies have been given out, there is anything left of your estate, you could create a situation when you are in partial intestacy, and the rules of intestacy will need to be taken into account.
Sign Your Will
This is something that those who choose to create a DIY will often forget – in order for it to be valid, it must be signed in front of two independent witnesses. Those witnesses must not be beneficiaries, and neither can they be married to anyone who is a beneficiary.
Store The Will
Storing your will in a safe storage facility is the best idea – it will be protected from damage including fire and water damage. And it won’t be lost, either. The worst thing that you can do after writing the perfect will is to hide it where no one will be able to find it when they need it!
Unlike in the distant past when there was just one way – finding a solicitor – to write your will, these days there are a variety of different options. Which one you choose depends on how confident you feel about getting it right; remember, any errors that are made in a will can hold up probate, or could even render it invalid.
Use A Solicitor
This is, for some, the safest way of writing a will. Safe in that the solicitor is an expert, and this is what they do day in, day out. They are not, of course, infallible, but they are used to getting these things exactly right.
It is also the most expensive options, so sometimes it can be more about budget than about personal choice – but that doesn’t mean that the other choices open to you are no good; they may suit you better in the end.
However, you should engage a solicitor to write your will if your estate is worth over £325,000 and there will be inheritance tax to pay on it. You should also use a solicitor if your family situation is a little more complicated than most (including estranged children, multiple marriages, and so on). Using a solicitor guarantees that your estate will go to the people or person you choose, rather than the one that the state says should receive the inheritance. A solicitor will also help you to protect the interests of anyone disabled, or underage – trusts can be set up, for example. It can also be good to use a solicitor if you are simply unsure of how to go about things; just having someone to speak to about your options can really help.
Use A Will Writing Service
The good news about using a will writing service is that they do tend to offer a good amount of support, much like a solicitor would, but for less money. This can be ideal if you have questions, but your budget simply won’t stretch to hiring a solicitor. It can also be much quicker than using a solicitor’s service. That’s because the people working for a will writing service only have that one job to do – a solicitor will have various other jobs as well, and the waiting times can be fairly lengthy.
As long as you do your research before engaging a will writing company then it is unlikely that you will receive poor service. Remember to find out how long they have been in the industry, and what their experience is (particularly with more complex family situations and with trusts). Although there is no law that says the will writer needs to be legally qualified, there are professional organisations that they can join – try to choose someone in one of those organisations if possible. It will give you peace of mind and comeback should something go wrong.
Write Your Will Yourself
Writing your own will can be a risk, but it is also the cheapest way of writing one, so it does often appeal. There is nothing wrong with a ‘DIY will’ (in fact, we offer them!) as long as you have carefully thought out what you want to include. This type of will is only really recommended, however, when your estate is a simple one.
Templates can be downloaded after being completed online. Once it is written, you will need to ensure that the will is witnessed, signed, and dated.