A will is a legal document that lays out by whom your estate should be administered after your death and any specifications on who should receive different amounts of your property after your death. Many people avoid creating their own will because it creates a sense of impending doom or makes you more aware of your own mortality, but what many people don’t realize is that technically everybody has a will already.
Governments around the world have different rules regarding the distribution of your estate after your death, but in theory if you do not create a will yourself, you’re simply accepting the default contract that the state has created for everybody.
Why should I just not stay with the default contract?
There are many reasons why you should create your own will. Morally speaking you want to be sure that the property and assets you worked hard to earn throughout your life end up being distributed as per your instructions. If you die without this document then many things can go wrong.
When it comes to British common law the basic contract is known as “intestacy” which is what occurs when someone dies and the total enforceable debts against their estate are less than the asset value. Intestacy determines how this equity will be distributed. There are administration costs that will eat from the value of your estate, especially if there is great value in your estate. The longer it takes to manage this process the more wealth will be eaten up in overhead administration costs leaving less for your loved ones. The government already collects an inheritance tax from your estate after you’re gone, do you really want them also being responsible for the remaining amount?
Another important reason to not stay with the default intestacy law is because you might not want an equitable distribution between family members. Maybe one child has been very instrumental in taking care of you in your old age and you wish to reward them. Maybe one of your grandchildren has special needs and will require more money to have a better standard of living. Maybe you’ve been in a state of cohabitation with someone that you want in your will who isn’t also your spouse. If you go down the route of intestacy then your unmarried partner(s) will receive nothing from you after you’re gone.
When should I create my will?
Its a good rule of thumb to start creating a will once you start gaining asset. Any time you bring major new assets onto your balance sheet you should review and make the necessary amendments to your will. Major life events will require that you amend your will to ensure that everything is up to date. As I alluded to previously, if you’re cohabiting a residence with a partner that you love very much but have not gotten married, then without a will they could end up without anything. If you get married the default state marriage contract will override your will unless your will specifically states that it was created with the knowledge of your marriage in mind. This is probably one of the most important factors, especially for those that remarry later in life. If you’re a widow and you’ve decided to remarry, but your will was set before your second marriage it may not apply and if you die before creating a new will the law of intestacy will apply. Assuming you had children in your first marriage, your children may be quite disappointed to find out that your new spouse is in charge of your estate even if a lot of that wealth was possibly generated by their father (your first husband). So it is paramount to make sure to draw up a fresh will that has contemplated the fact that you’ve been married and has been created in spite of that fact.
It is also important to think of your children, especially if you currently have dependent children. If you were to unfortunately suddenly pass, you should have a will drawn up to ensure their safety to your exacting specifications. If you die in intestacy without a will, then the future of your children will be placed in the hands of the courts, which will undoubtedly put remarkably unnecessary stress on them, which is the last thing they need after losing their parent.
How do I create a will?
There are a few different ways to go about drawing up your will. If you have a small amount of property and you feel comfortable you can simply draw it up yourself with templates from the post office or you can even buy them from Amazon however its not something we recommend. If you have a medium amount of property then you are far better of taking advice from a expert will writer. At my key man insurance we have experienced will writers who are happy to give a simple advice on how to set up your own will. Please give us a call if this is something you would like to do.