Talk Money Week, an annual campaign dedicated to promoting financial awareness and education, serves as an excellent opportunity to address a critical aspect of personal finance: the necessity of organising one’s financial affairs through a will. In this essay, I will delve into the significance of Talk Money Week and the compelling reasons why individuals should prioritise creating a will. Furthermore, I will explore the dire consequences that can ensue when one passes away without a will in place.
Talk Money Week: A Timely Reminder
Talk Money Week, celebrated annually, serves as a timely reminder of the importance of financial literacy and prudent financial planning. Organised by financial institutions, government bodies, and non-profit organisations, this event aims to foster conversations about money management, estate planning, and financial well-being. The initiative underscores the value of informed decision-making regarding personal finance, which includes creating a comprehensive and legally binding will.
Why does will matter?
A will, often referred to as a “last will and testament,” is a legal document that outlines how an individual’s assets and possessions will be distributed upon passing. It serves as a sort of roadmap for the executor of the estate. A will offers several compelling reasons for its creation:
Control over Asset Distribution: One of the primary reasons for having a will is the ability to dictate precisely how your assets are distributed. This ensures that your wishes are honoured and that your loved ones receive the inheritance you desire.
Appointing Guardians for Minor Children: Parents can use a will to suggest guardians for their minor children. This can ensure that, in the event of their untimely passing, the children’s care is entrusted to a responsible and chosen individual. This is something we can all overlook in the glory days of welcoming your new bundle of joy into your life, but it really is something of great importance.
Minimising Family Disputes: Without a will, disputes among surviving family members can escalate, leading to potentially costly legal battles. A well-structured will can help prevent such conflicts and maintain family harmony during what would be a very challenging time, even without any family disputes.
Efficient Probate Process: A properly drafted will can expedite the probate process, reducing administrative burdens and legal costs for the beneficiaries.
Tax Planning: A will can also incorporate tax-efficient strategies to minimise the tax liability of your estate, preserving more of your wealth for your beneficiaries. This is something a legal expert in this field could discuss with you. You may hear your neighbour down the road discussing things such as ‘Trusts’ or ‘Lifetime Gifts’, and you may be curious to see if you could benefit from timely planning and great consideration of the same.
Charitable Bequests: If you have charitable inclinations, a will allows you to leave assets to your preferred charities or causes, leaving a lasting legacy. You may already support a charity during your life; why not leave a parting gift for them? Many charities are in desperate need of support, and you could be helping out many by leaving something to them in your will. There are also tax advantages to leaving a percentage of your estate to charity, and this is something we at Hansells could happily discuss with you.
The Consequences of Dying Without a Will
While the significance of having a will is clear, it is equally important to understand the consequences of dying without one. When an individual passes away intestate (without a will), the UK’s laws and regulations dictate the distribution of their assets, which, of course, is something that many of you may not be so happy with.
Here are some potential ramifications of dying without a will:
Assets Distributed According to Intestacy Laws: In the absence of a will, the distribution of assets follows the intestacy laws of the state. This may not align with your wishes and could lead to assets going to unintended beneficiaries. This can be unfortunate if, for example, there is a family fallout, you want to benefit a partner that you are not married to or in a civil partnership, or you have children who are not legally yours.
Delayed Probate Proceedings: The probate process for intestate estates can be more time-consuming and costly due to the varying complexities of an intestate estate, which is not ideal for a family who is grieving. As aforementioned, a will serves as a roadmap to the deceased’s wishes and without a map there can be untimely delays!
Family Disputes: The absence of a clear will can result in disagreements among family members about asset distribution, leading to strained relationships and legal disputes.
Potential for Unintended Beneficiaries: Without a will, distant relatives or even estranged family members may inherit assets, while those you intended to benefit are excluded. Although wishes may change throughout your life and a will can be updated, the Intestacy Rules remain the same.
Lack of Guardian Designation: If you have minor children, the court will decide on their guardianship, potentially disregarding your preferences, and this can be heartbreaking for the surviving family and children.
Talk Money Week serves as a valuable reminder of the importance of financial literacy and prudent financial planning, with the creation of a will being a central component of such planning. A will provides individuals with control over their assets, the ability to protect their loved ones, and the opportunity to minimise legal complications and taxes. On the contrary, the absence of a will can lead to numerous consequences, including asset distribution that may not align with one’s wishes, family disputes, and prolonged probate proceedings.
As we celebrate #TalkMoneyWeek, let us acknowledge the significance and perhaps normalise organising financial affairs and the creation of a will. By engaging in open discussions about personal finance and estate planning, individuals can make informed decisions to protect their assets and provide for their loved ones. I always try to encourage my clients to be open with their family or close friends, so long as they feel comfortable. We need to begin to normalise the discussion over death wishes. For example, do we want an ice cream van at our funeral in the middle of December just because ice cream at the beach is our favourite pastime? Would I like to be buried or cremated? Who do I trust to deal with my estate when I die? Should I be considering any tax-efficient strategies? There are all sorts of queries and questions.
I had a large family dinner over the weekend and announced that I would like to be buried in the church where I married. Now, whether they can fit me in there or not is another thing, but at least I am talking about it and having an open conversation. It is easy for me to say as I live and breathe wills and tax planning, but dying without a will may result in unintended consequences, which can be avoided through thoughtful financial planning and the execution of this essential legal document.
I think I will reserve the details for a future article, but just to mention, a lot of my clients come and see me about their wills because it’s time for a review, or perhaps time to get down to it and make one. In the discussions surrounding their wills, we more often than not get on to the topic of Lasting Powers of Attorney – both Property & Financial and Health & Welfare. These are another two critical documents that are becoming more and more important in our modern world.
Another topic I could discuss for hours is pensions. Could it be time for a review of these with your financial advisor?
In sum, the message is clear: during Talk Money Week and beyond, it is crucial to address the necessity of a well-structured will in one’s financial journey, along with other important financial and welfare planning that may crop up unexpectedly along the way. Perhaps it is a topic that you have not thought about in a while or even never, but here at Hansells, we offer a very warm welcome and friendly approach, and we try to ensure you feel comfortable when discussing such delicate and sometimes upsetting matters.
If any of the above has leaped out of the page to tell you to book in and see us, please give us a call, and we would be happy to schedule a time.