We’re severely short of will power
BENJAMIN FRANKLIN once said that only death and taxes are certain in life. From the evidence of research published this week by unbiased.co.uk, it seems many people are choosing to ignore both.
Nearly two thirds of adults in Britain – some 30m people – do not have a will prepared. As a result, they not only risk their money being left to the wrong people but their descendents may also have to endure difficult legal procedures or pay unnecessary taxes.
While predictably younger people are less likely to have a will – barely one in 10 of those aged under 35 has one – a disturbing proportion of older people are equally unprepared. Over a third of those surveyed aged over 55 do not have wills in place either. Almost as concerning is the fact that 70 per cent of adults with children under 18 do not have a will prepared either.
The costs of not having a will can be exorbitant. Someone who dies without a will is said to have died “intestate”. In those circumstances, their property is divided up according to a strict set of regulations, with spouses only automatically inheriting the first £250,000 of an estate.
The rest is divided between children and other relatives according to a strict list of priority. Common law spouses do not receive anything and in the event that there are no surviving blood relatives, the entire estate reverts to the Crown.
As Karen Barrett, chief executive of unbiased.co.uk, puts it: “Many people are simply unaware that should they die without a will, their assets are distributed according to the rules of intestacy – meaning their assets may not be going to those they would like them to go to.”
Indeed, 92 per cent of people have a clear idea of who they want to inherit their possessions. Eighty-seven per cent would prefer their family to get their estate, but some 4.5m people want their possessions to benefit charity and a further 1.5m would leave their estates to their pets. For someone without a will, those wishes are unlikely to be fulfilled.
Moreover, any inheritance tax due can be payable upfront as a condition for assets to be released, leaving families having to raise loans just to get at an estate. It is also very unlikely that inheritance tax will be effectively minimised.
The research offers several reasons why so many people are unprepared for death. Some – about 7 per cent – are put off by the cost, despite the fact that legal advice can now cost as little as £120 and some charities offer the service in return for a donation. A further 18 per cent of people claim not to have enough assets for it to be worth it. But the number one reason cited is sheer apathy – over a third of people claim simply “not to have got around to it” yet.
The problem may be more profound, however. Peter Nellist, a partner at Clarke Willmott, says that for some “the feeling appears to be that executing a will is akin to signing your own death warrant”. He quotes the case of a client who refused to make a will in his late 70s, on the basis that his father had lived to 95. He died three months later, leaving his estate in a mess. For some people it seems, the only acceptable plan is to live forever or die in the attempt.