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Mattioli Woods: HOW LONG WILL YOUR NEW YEAR RESOLUTION LAST?

The alternatives are really too horrible to think about. So, as New Year’s resolutions may be dwindling, why not pick one that will give you peace of mind and benefit your loved ones for years to come. Make a will or update your existing will.

It’s a surprising fact that according to Royal London, 59% of UK adults do not have a valid will. [1]

It is also human nature to find it difficult to plan for death. Dying without a will or “intestate” can have painful and unexpected consequences. Intestate inheritance laws for married couples in England and Wales establish a strict hierarchy as to who inherits your estate. This may not reflect your wishes and can lead to often costly and unpleasant family disputes. In addition, the delays in distributing an intestate succession can be long. There is good information from Citizens Advice on this topic if you want to know more. Finally, if you are in a cohabitation but not married, or in a registered civil partnership, without a will, your partner does not inherit anything!

Needless to say, there are some very positive and compelling reasons why you should write a will and keep it up to date, including:

  • safeguarding your assets

  • take care of your family and loved ones by appointing guardians, executors and trustees you can count on to make the right decisions

  • mitigate and manage the IHT

For many people in the UK their greatest asset will be their home. Ensuring that it is passed on to the right beneficiary and in a tax-efficient manner is an important part of asset protection. A zero residence rate band (RNRB) was introduced as of April 6, 2017. It is available when residential ownership is left to direct descendants. However, RNRB comes with conditions and therefore may not be available – or available in its entirety – to everyone. So it makes sense to make sure that this tax break, which can go up to £ 350,000, is properly planned during your lifetime as part of your estate planning.

Your will also sets out your wishes for your other assets, including investments, cash deposits, jewelry, cars, business interests, and priceless sentimental items including heirlooms. You should also consider your digital assets, which includes rights and ownership of electronically stored image videos and even crypto assets. This last point is quite new considering the explosion of the digital world over the past decade. This is an area that requires very careful planning to protect your digital assets and your privacy while you are alive, but to make those assets known and accessible after your death.

We recommend that a will be kept up to date and revised at least every five years to ensure that it remains relevant to your wishes, and more frequently when there are major changes in circumstances.

David’s case

David (63) and Joanne (54) had been in a relationship for three years. David’s adult children from his previous relationship also lived with them. David was in the process of divorcing his wife Deborah.

David owned a manufacturing business and was highly motivated to work for many years. While still acknowledging that he needed to write a will, he never got down to it as there was always something more important to deal with, in his eyes.

David passed away suddenly leaving behind a large and complex estate that included the family home, savings and investments as well as his business assets. The intestate death led to a long and chaotic probate in which neither the children, his ex-wife Deborah nor his partner Joanne had access to David’s assets. The business was left in limbo and without a clear direction, causing serious uncertainty for staff and customers. Joanne had to leave the house. One can only begin to imagine the distress and tension that existed between Joanne, Deborah and David’s children.

How do I go about obtaining a will?

While there are many DIY will packages out there, Mattioli Woods always recommends seeking specialist advice from a qualified lawyer or will drafter. Their job is to ensure that the will reflects your own circumstances and wishes and that it is properly executed and attested to. Your will is an essential part of an estate planning strategy covering provisions for care, donation of assets, and general estate planning.

Your retirement savings

When preparing your will, it should be noted that most pensions you have will be out of your estate and are subject to their own death benefit rules. It is therefore important to inform your notary of the way in which you want your retirement assets to be distributed in the event of death so that there is consistency between your will and your retirement wishes, called “appointments”. We can help you update your pension plan appointments and those of any other financial product, such as life insurance, held in trust.

We understand the peace of mind you can get from having an up-to-date will and knowing that your affairs will be arranged according to your wishes. This is a great idea for a New Years resolution and your loved ones will thank you in the future.

[1]- Source: Royal London’s top five tips for writing a will. – https://www.royallondon.com/media/press-releases/press-releases-2021/march/top-5-tips-for-writing-a-will/


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