Skandia's Rachael Griffin examines the formalities of handling clients' wills.
It is estimated that seven out of ten people die without leaving a will.
Without one, the deceased’s estate will be subject to laws that dictate how it should be distributed. This may lead to assets going to individuals the deceased may not have wanted to benefit from their estate. Additionally, the absence of a will can cause lengthy delays when it comes to the distribution of the estate.
There are many advantages of making a will:
Where there’s a will...
• Control: Clients are able to choose how they want their estate distributed.
• Tax mitigation: Clients are able to distribute their assets in the most tax efficient way possible. This could be through utilising the transferable nil-rate band, using trusts or making gifts to charities.
• Avoiding disputes: As it is the deceased who has decided how to distribute assets, this should help to avoid disputes between family members.
Making sure clients have a valid will in place should be a fundamental part of the financial planning process – but is only the start. Ensuring the validity and formality of executing the will is of equal, if not greater, importance.
With this in mind, one of the key decisions your clients will need to make is who should be the executors. Being an executor can be a challenging task, depending on the complexity of the estate.
They are legally responsible for obtaining probate and, therefore, identifying all the deceased’s assets. They are also responsible for settling the tax due on the estate. This may mean dealing with numerous financial institutions and government agencies, such as HMRC and the Department for Work and Pensions.
Generally, more than one executor is chosen and, in some instances, a professional executor, such as a solicitor or accountant, is employed. This is more likely for complex or large estates and the estate will bear the cost for these services.
A will does not have to be drafted by a solicitor and there are many “do it yourself” options available. However, these have been subject to criticism over the years due to the lack of formality and clarity in the drafting of certain clauses.
The Legal Services Board consumer panel commissioned research into the detriment caused by the current unregulated will writing market in England and Wales, and recommended it should become regulated.
However, the government has not supported this and unregulated will writing continues. This means extra care should be taken to ensure any will appropriately sets out what the clients’ requirements are and is fully valid.
In order to ensure validity, a will must be signed in the presence of two independent witnesses (who cannot be beneficiaries). All three individuals should be present at the time the will is executed.
It is recommended a will is reviewed at least every five years and after any significant life events, such as having a child/grandchild, getting married/divorced or moving or returning from abroad.
As a significant life event, it is also worth considering whether a marriage/civil partnership automatically revokes a will. While this has generally been the case in England, Wales and Northern Ireland, there is an exception to be aware of.
Section 18 (1) Administration of the Justice Act 1982 replaces Section 18 of the Wills Act 1837. This confirms a will made on or after 1 January 1983 is no longer automatically revoked by marriage if, at the time the will was made, the testator was expecting to marry a particular person and they did not intend to revoke their will because of that marriage.
The equivalent provision applying to wills made in Northern Ireland on or after 1 January 1983 is the Wills and Administration Proceedings (NI) Order 1994.
If your client wishes to revoke an existing will, this can be achieved in a number of ways, including creating a subsequent will or codicil. Generally, a will or codicil will include a revocation clause, meaning a later will/codicil would take precedence.
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