“What you want, baby, I got it”, sang the Queen of Soul Aretha Franklin in her 1976 mega-hit Respect. But now, what she had is the focus of an increasingly bitter battle between her four sons as they fight over her legacy.
Aretha Franklin died in 2018 from pancreatic cancer. Despite her phenomenal success, she did not leave a will. Two hand-written and near-illegible wills have since emerged, one signed with nothing more than a ‘smiley face’ and are at the heart of a court case in the US. It is unlikely to be the legacy she would wish to be remembered for.
Whilst most of us may not have a legacy that matches Aretha Franklin, like her some 60% of the UK population does not have a will in place. And with increasingly complex family arrangements disputed inheritances are on the rise.
Put bluntly and regardless of the size of an estate, a well-drafted will is the simplest way to ensure an estate is distributed in the way you wish after death.
Here are just a few reasons why everyone should have a will and keep it updated.
Guardianship of children
Parents of children under the age of 18 will want to choose who will take parental responsibility should you pass away. A will makes this possible. Where there is not a written nomination in a Will, the courts will make that decision for you. Whilst the courts will always act in the best interests of children, the guardian it appoints may not always be your preferred choice.
Distribution of assets
A will determines how your assets will be divided amongst family and friends. When an individual dies without a will, the intestacy rules will apply, meaning your estate will be divided between your relatives according to the statutory regulations.
If you were to die leaving a spouse and children, then contrary to popular belief, the surviving spouse will not automatically inherit everything under the intestacy rules. Instead, the spouse will be entitled to the first £270,000 of any assets with the remaining shared 50% passing to the spouse and to children.
A well-drafted will also provides you with an opportunity to keep more control over how the funds in your estate are dealt with (such as specifying the minimum age at which a beneficiary should inherit), whereas the intestacy rules do not.
A will also offers the opportunity to distribute assets to friends and wider family members. The intestacy rules do not.
Unmarried partners
A will is vital when living with a partner but not married, often called a ‘common-law husband or wife’. Contrary to popular belief, common-law partners do not have rights to their partner’s estate on death, unless a will makes that provision. It can result in that loved one potentially losing the family home as intestacy rules only permit blood relatives to inherit.
Inheritance tax
Except where the entire Estate passes to a spouse or charity, inheritance tax is payable on individual estates valued over £325,000 – the nil rate band – with the transferable nil rate band from a deceased spouse increasing that threshold to £650,000. An additional £175,000 is available under the residential nil rate band (for estates worth less than £2 million), raising the IHT threshold to £1m for married couples passing property to their children. Inheritance tax is then charged at 40% on the remaining estate.
A will enables you to direct assets in a way that can help individuals avoid any unnecessary IHT. However, the intestacy rules do not allow for this flexibility. For a sizeable estate, this could leave a loved one with an unexpected and potentially sizeable IHT bill.
A will is a simple, straightforward and inexpensive way to manage your estate and provide direction on its distribution, helping avoid costly disputes and family feuds. The best and final gift you can leave family members is a well order estate.
And with apologies to Aretha, “You better think (think), think about getting and updating a will…”
Contact our Private Client Solicitors
For initial advice or to arrange a meeting with one of our Private Client team, please email privateclient@bishopandsewell.co.uk or call on 020 7631 4141
The above is accurate as at 13 July 2023. The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
