Where there’s a will…
17th October, 2014
RECENT research conducted into people's knowledge of and attitudes to wills and inheritance matter makes for some sobering reading.
According to Investec Wealth, almost two thirds (64%) of adults do not have a Will and of those that do, almost a third (32%) are out of date as they have not been revised to take into account major life changes, including marriage, children and divorce.
What’s more, the research also revealed that:
- 33% of Wills in existence were last reviewed over six years ago
- 10% of Wills have either never been checked or were last done 20 years ago
- 81% of married people did not know their existing Will was revoked when they tied the knot
- 63% of married people either don’t know or wrongly believe that they are automatically covered by their partner’s will
However, perhaps these statistics are not all that surprising.
Whilst lawyers such as those in the Private Client team at Ward Hadaway deal with these issues every day of their working lives, many people tend to put off making a Will or reviewing their Will until there is a change in their financial or personal circumstances, such as divorce, ill health or bankruptcy.
For clients with business interests the statistics could be even more alarming.
How many businesses do not have a formal agreement in place to cover the death of one of the business owners?
How many businesses have no provision in place to cover corporate debt?
How many businesses could last more than 18 months on the death of a key person?
We appreciate that while business is good, these are not the sort of topics clients want to think about but they are a fact of life – business and personal.
The Intestacy rules relating to people who die without a valid Will changed on 1 October 2014 but the changes do little to protect clients with business interests.
Similarly for those businesses without a formal agreement in place, there are statutory provisions, some dating back to 1890, determining what should happen to the business.
Without an up to date Will and business succession plan, business owners run the risk that they are not maximising the availability of business property relief for inheritance tax, that their spouse’s financial stability could be affected, that the business will not be able to continue and they are also exposing their estate to increased legal costs.
A well drawn-up Will in conjunction with a business succession plan can provide some of the solutions and give peace of mind to business owners and their families.
Out of date Wills can, in some situations, be more dangerous than not having a Will at all.
Relationships change, you might no longer have contact with the executors, they may no longer be suitable to manage a client’s estate or be considered trustworthy to do so and they might not understand the business at the heart of a client’s estate and the issues it will face following the death of one of the owners.
There are so many horror stories that it is just not worth taking the risk.
At the end of the day, what most people are looking for when it comes to their affairs is certainty and protection.
A well drafted Will can provide both, together with flexibility to take into account changing personal and financial circumstances.
Andrew Facer
Partner, Head of Private Client
* For more information on the issues raised by this article, please contact Andrew Facer.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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