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Did you know that almost 30 million people in Britain don’t have a will, including more than third of people over 55? Despite this, one in five Britons expect to leave £10,000 in savings when they die.  These and many other statistics, from local professional advice provider unbiased.co.uk, highlight the UK’s alarming lack of awareness about wills.

For many people, making a will is just a permanent fixture on the ‘to do list’, without ever getting around to actually doing it.  During November this year, Will Aid is working with solicitors all over the UK for ‘Make a Will Month’ to help you get an affordable will and also to raise much-needed funds for nine of the UK’s best-loved charities. Find out more about it here.

No-one likes the thought of making a will. It’s an unwelcome reminder that we won’t be around forever, and who wants to dwell on that? The simple fact is if you die without having made a will (which is known as “dying intestate”), the people you love might be left with nothing. And someone you don’t like could get the lot.

Making a will doesn’t have to mean that you’re on your way out. What it does mean is that you care about where your money goes, and just as importantly, where it doesn’t go.

• But I’m only young!
• What dying intestate means for your family
• When to make a will
• How to go about making a will
• Am I eligible for financial help?
• Digital legacies
• Changing an existing will
• The effect on inheritance tax

But I’m only young!

By their very nature wills tend to be associated with older people. But most of us have no idea when we’re going to die, which is why it’s important to get things sorted ASAP. Jill Dando was just 38 when she was murdered, and because she died intestate, all of her fortune went to her father. Yes he was a close relative, but what about the other loved ones in Jill’s life who were left nothing? Jill isn’t the only one, however, as around 84% of people under 35 do not have a will in place.

What dying intestate means for your family

Certain rules have to be followed when dealing with the estate (i.e. the cash, belongings, property etc) of someone who has died intestate. These rules are known as the “rules of intestacy” and could go completely against the wishes of the deceased. But by choosing not to write a will they sacrifice their right to be heard.  Worryingly, 10% of those without a will believe that their estate will automatically go to the right person when they die.  This is not the case.

Imagine going through a really bitter break-up with your spouse or civil partner, but not getting around to actually divorcing them. If you die intestate, the chances are they’ll get the lion’s share of your estate, whilst your new partner who stuck by you through thick and thin, isn’t entitled to a penny.

Or maybe you have specific plans regarding the care of your children should anything happen to you and your partner. By dying intestate, there are no guarantees that these wishes will be carried out.

The rules of intestacy are pretty complex but you have to take on board what they mean for your family.

There’s the financial importance of making a will of course, but you will also be protecting your loved ones from a lot of mental anguish if you don’t leave them with huge decisions to make themselves.  People who don’t leave a will could be setting up their family for a lot of squabbling over assets and awkward demands.  You could also save them the stress of making funeral arrangements at an emotionally trying time.

This is what you can currently expect if you’re:

Married or in a civil partnership and have children

In this case, your spouse or civil partner would be entitled to the first £250,000 from your estate, plus your personal belongings. If your estate was worth more than £250,000 the excess amount would be split equally between your spouse or civil partner and your children.

Your spouse or civil partner couldn’t actually spend or sell this extra bit of your estate, but they would receive what is known as a “life interest” from it. This means that any interest the estate made would be theirs, so it might be wise for them to invest it.  Once they die the whole estate would then be passed to your children.

So unfortunately for your kids, unless your estate is worth more than £250,000, you dying intestate means they won’t be entitled to a penny. Shockingly, 70% of adults with children under the age of 18 do not have a will in place despite over half of them wanting to leave some assets to their children.

Your will would also be a way of appointing a legal guardian for your children.  It is vital to consider who you would like to look after and care for your child.  If you have a partner they may not necessarily have any claims to be the natural parent figure.

Married or in a civil partnership but don’t have children

If there are no children involved then your spouse or civil partner will get a larger chunk of your estate, currently the first £450,000. If your estate is worth more than this then the excess amount will be split equally between your spouse or civil partner and your parents.

If your parents have already died there is a hierarchy of close relatives who could potentially inherit. But if you’ve got no close relatives then your estate will go to the Crown (known as bona vacantia), a bitter pill to swallow when you could have left it to friends or a charity that’s close to your heart.

You have a partner but aren’t married

Then it’s bad news I’m afraid, as under the rules of intestacy your partner won’t automatically be entitled to a penny of your estate.

Over a third of those who have a partner and aren’t married would like to leave their assets to their partner if they died. If your partner relied on you financially and/or feels like they’ve been unfairly overlooked, they could make a claim for some of your estate. But it’s a tricky process to go through and there’s no promise of victory. Why put them through that when you could secure their future just by making a will?

The rules of intestacy are a complicated business and there are obviously loads more scenarios out there than the ones stated above. The thing to remember is that making a will is the only way you get to decide who inherits what from your estate.

For the ins and outs of who would inherit under the rules of intestacy, visit HM Revenue & Customs. The rules of intestacy are slightly different in Scotland and Northern Ireland, so if they apply to you then go onto the HM Revenue & Customs website then click on the name of your country.

When to make a will

There are a number of significant moments in your life where making a will becomes even more essential. These include:

• Buying your first home – homeowners should have a will to ensure that their property (or share of it) goes to whom they choose.
• Marriage or entering into a civil partnership – ensure your loved one is taken care of in the event of your death.
• Having children – stipulate the person or people you want to look after your children, otherwise the law decides.
• Getting divorced – it’s likely you’ll want to ensure that an ex-partner is not entitled to your estate.

Before you start making your will it’s a good idea to consider some issues before you start with all the paperwork.  Start with considering what assets you have and assessing your financial situation.  If you have children think carefully about who you would trust best to look after them and whether you want to set up a Trust for them (helping to beat inheritance tax).  You will need to decide who you want to benefit, including leaving any money to charity.

How to go about making a will

Making a will can be a bit of a minefield as there are rules you have to abide by in order for it to be valid. One minor mistake could render the whole thing void; an awful outcome considering you took the time to make one. If your will was deemed to be void then the rules of intestacy would apply.

There’s nothing stopping you from making your will yourself, and the Citizens Advice Bureau offer some great advice on how to do it correctly. You can even buy a will pack from places such as WHSmith and Amazon, as well as  many available on the internet, such as Lawpack (£9.99)  and DIY Wills (£19.95).   However, these do-it-yourself kits are not always entirely accurate and if you make a mistake, there could be costly legal fees to pay after you die.

If you would like professional help (which sounds like a good idea to us), The Law Society can put you in touch with specialized solicitors, whilst the Citizens Advice Bureau will also be happy to point you in the right direction.

Yes, getting professional help will cost you (around £150-£200), but if there’s a lot at stake you might not want to run the risk of mucking it up.

For information on who can make a will and what should be taken into account, visit Directgov.

Am I eligible for financial help?

There may be some circumstances in which you’re eligible for assistance with fees:

• If you are 70 or over
• If you are disabled and/or the parent of a disabled person and wish to provide for them in your will
• If you are a single parent wanting to appoint a guardian in your will
• If you are a member of a trade union offering a free will-writing service.
• Barnados is offering a free will service for the over 55s, giving you the opportunity to work with a qualified solicitor for free.

As part of ‘Make a will month’, Will Aid have a number of solicitors who are offering to write your will and waive their fee in return for a donation to charity.  Those taking part include Christian Aid, NSPCC, Save the Children and British Red Cross, so it’s all for great causes.

Digital legacies

According to iCroak, Britons store an estimated £2.3 billion of assets online.  This includes money stored in PayPal, online bank, poker and bingo accounts and credits with Amazon or iTunes.  In addition, people have electronic data of sentimental value, such as photos and videos on Facebook, Flickr and Myspace, along with treasured emails they may have received from distant relatives.

iCroak provides a service for people to store their digital assets in a secure online account.  When that person passes away, this account can then be accessed by nominated loved ones.  It can even include passwords to otherwise inaccessible online accounts such as eBay.

Signing up and creating an account is free, while adding an executor or ‘guardian’ costs from £10 per year.

Changing an existing will

Life constantly changes, which is why you need to make sure that your will is kept up to date. Marriages end, babies are born, relationships are forged- all of these things could effect who you’d like to benefit from your estate.

There are official ways of going about it, so leave your rubber and Tipp-Ex in the drawer! The Citizens Advice Bureau has some solid advice on how to change your will without making it invalid. Just go on their site and follow the links.

You can use a document called a Codicil to make minor amendments for half the cost of re-doing the whole will.

The effect on inheritance tax

Ah, inheritance tax. One of life’s biggest kicks in the guts.  In case you didn’t know, inheritance tax rules state that if your estate is worth more than £325,000 (for the 2012-2013 tax year), then the excess amount will be taxed a whopping 40% following your death.

But by getting your affairs in order prior to your death (i.e. making a will!) you could minimise the amount of tax your estate gets charged, and maximise the benefits you leave your loved ones behind.

There are loads of ways to lower the amount of inheritance tax due on your estate, you just need to be a bit savvy and do your homework. For large estates we highly recommend you talk to a solicitor, as they will know every loophole in the book.

Directgov offer some key information when it comes to who is exempt from paying inheritance tax, and Moneymagpie also has a valuable article on how to pay less tax in general.

And one more thing…

Don’t forget your debts! Most people have debts, at least during their working life, and on your death, creditors have to be paid before any money can be distributed to the beneficiaries. If your debts are bigger than your assets consider taking out a life insurance policy to ensure that your family at least get something.

Why not take a look at one of Moneymagpie’s many articles on how to get out of debt?

Useful Links

• For more information on Will Aid and National ‘Make a Will Month’, click here.
• Unbiased.co.uk
• iCroak
• Directgov