Wednesday, April 24, 2024
LegalConveyancingAs a first time buyer should I consider arranging a Will?

As a first time buyer should I consider arranging a Will?

Chloe Eyles is an Apprentice Solicitor in the Wills Trust and Probate Department at Prince Evans Solicitors LLP and explains why it is important to arrange a Will

There is a common misconception in today’s society that having a Will in place is “tempting fate” or something to be done later on in life. Regardless of owning property or not, it is advisable that every adult has a Will in place. While you may think your estate is not significant enough to make a Will, you never know what the future holds and you could end up inheriting money or winning the lottery. 

What happens If I die without a Will?
In the event that you were to pass away without leaving a Will, you would die “intestate” and so your estate would essentially pass in accordance with the Laws of Intestacy. 

In brief, the intestacy rules stipulate if you are married, with no children, your entire estate passes to your surviving spouse. This can be problematic in the event that this is not in line with your wishes. 

If you are married with children, and your estate exceeds a value of £250,000, the intestacy rules direct that the first £250,000 of your estate shall pass to your surviving spouse and the balance of your estate is to be split evenly between your surviving spouse and any surviving child or children. This again can be far from ideal and does not allow you to maximise the use of the available inheritance tax thresholds. 

In the scenario that you pass away unmarried without having any children, not leaving a Will, and your parents are still alive, the intestacy rules state that your estate is to pass equally among such of your surviving parents. 

Similarly, should your parents have not survived you, the estate would then pass to such of your siblings in equal shares. 

In essence, ensuring you have a valid Will in place provides you with certainty that upon your death your estate shall pass to your intended beneficiaries. The intestacy rules do not accommodate for the exclusion of any person; or the gifting of assets to specific individuals.

Why is having a Will in place important if I own property?
If you own property solely, a Will can become an extremely important tool if you wish for that property to pass to someone in particular who you are not leaving the rest of your estate (otherwise known as the residue) to. 

It is also extremely important if you wish to make a specific gift of your property within a Will to detail as to whether you wish for the gift to pass to the intended beneficiary free of, or subject to,  inheritance tax. 

Similarly, if there are any outstanding mortgages or charges secured against the property upon your death, it is crucial to detail whether the intended beneficiary is to settle these themselves upon receipt of the property; or as to whether your estate shall exonerate any charges levied against your property as at your date of death. 

When it comes to owning property jointly, it is important to establish how your property is held with others. 

There are two different ways in which you can own property jointly: 

  • As Tenants in Common 
  • As Joint Tenants 

When property is held as Tenants in Common a restriction is placed against the title to the property at HM Land Registry which, for the purposes of Wills and Inheritance, means that upon the death of the first owner their share and interest in the property shall pass in accordance with the terms of their Will. 

On the other hand, when property is held as Joint Tenants, upon the death of the first owner the property automatically passes to the surviving owner(s) irrespective of the contents of their Will. In summary, upon the death of the first owner, holding property as joint tenants ensures that the property is not an asset which passes in accordance with the terms of a person’s Will. 

If you are unsure as to which manner you hold your property, it is advisable that you seek confirmation of such so that when you come to make your Will you are aware of whether the asset will pass in accordance with the terms of your Will; or not. 

If you own property jointly as Joint Tenants, however do not wish for your share and interest in the property to pass to the surviving owners and instead wish for it to pass in accordance with the terms of your Will, it will be necessary for you to change the manner in which the property is held jointly from Joint Tenants to Tenants in Common. This can be done by severing the title to the property. 

What does the Will writing process involve?
Writing a Will is not an exhausting task. There are many sub-sections to a Will which may or may not be applicable, and which you may wish to consider beforehand.

Appointment of Executors and trustees
Your Executor(s) are the people who essentially take on the role of administering your estate upon your death. Their responsibilities include taking account of all of your assets and liabilities upon your death and obtaining date of death values of them, accounting to HMRC and attending to the settlement of inheritance tax (if applicable), as well as obtaining a Grant of Probate. 

Once the Grant of Probate has been obtained, they are then responsible for settling all estate liabilities and taxes, transferring or liquidating assets and then holding the net estate upon trust to be distributed in accordance with the terms of the Will of the deceased.

Funeral Directions
You may or may not wish to express your preferences in relation to your funeral arrangements within your Will. These can be as simple as directing as to whether you wish for your body to be buried or cremated or can be as extensive as directing your organs to be donated and for your ashes to be scattered in a special place. 

Specific gifts of items
You may wish to leave items of sentimental value to specific individuals on your death. This can be included within your Will to ensure that it takes effect upon your death. 

Guardianship clauses
In the unfortunate event that you were to pass away before any child or children of yours were to reach the age of 18, you can make provision within your Will for the appointment of guardians. 

You can make gifts of set sums of money within your Will to a family member, friend or charity. 

If you own a share or interest in a business, and the Company Articles do not direct what is to happen to it upon your death, you can make such provisions within your Will. 

In the absence of any specific directions regarding your property within your Will it shall form part of the residue of your estate. 

If you do not wish for your share and interest in a property to pass to your residuary beneficiary(s) then a clause to facilitate a specific gift of that property shall need to be inserted into your Will. 

The residue of your estate is essentially what is left after the payment of all funeral, testamentary expenses, any taxes, gifts and legacies; the “net” estate. 

It is possible within a Will to make provisions that if your beneficiary(s) in the first instance predecease you, the estate can then pass to alternative beneficiaries. 

Lasting powers of attorney 
While Wills are legal documents which take effect on your death, it is also important to consider having your affairs in order during your lifetime in the event that you no longer possess the requisite capacity to manage your property and financial affairs. 

Lasting Powers of Attorney are legal documents in which you, in your capacity as the Donor, give power to your nominated Attorney(s) to manage your property and financial affairs if you become unable or unwilling to do so yourself. 

While drafting a Will gives you a lot to consider it is of upmost important to have one in place, especially if you do not wish for your estate to pass in accordance with the intestacy rules. 

Having a valid Will in place is the only way to give yourself peace of mind and to ensure that your wishes will be adhered to upon your death. 

It is important to ensure that you seek sufficient professional legal advice when making a Will and to steer clear of Will making kits to avoid any possibilities that your Will is not legally binding or in line with your wishes. 

Should you have any queries in relation to Wills or your property Prince Evans specialises in all aspects of Private Client and property matters. Please contact Prince Evans’ Wills, Trusts and Probate Department for a friendly, no obligation chat on 020 8567 3477 or 

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