When a loved one passes away, it can be a stressful time. The emotion that comes with death, combined with the essential administration that needs to be completed can make a really difficult time of your life even more challenging. However, at least part of this load can be alleviated if the individual who has passed has put a Will in place.
Creating a Will can cause less stress for your family and loved ones in the long run, offering a clear indication of your wishes. However, if you don’t have a Will, your assets will be distributed according to the rules of intestacy. In this guide, we look at how Wills work, the rules of intestacy and What Happens To Your Debt When You Die.
What is a Will?
Put simply, a Will is a legal document that ensures your money, possessions and investments – known as your estate – go to the people you want to benefit. To be legally valid, your Will needs to be formally witnessed and signed by both you and two independent witnesses.
How do Wills work?
A Will should cover your entire estate, including any property you own, bank savings, insurance, investments, vehicles, valuable belongings and furniture. How complex your Will is depends on the assets of your estate but it should always clearly state how you want your estate to be divided.
For this, you need to think about who you want to benefit, whether you want to give anyone specific gifts, and if you want to leave any money to charity.
You also should include who the executors of your Will are. After you die, executors are responsible for sorting out your estate which includes dealing with all the paperwork, potentially settling any debts or funeral costs and paying out gifts to beneficiaries.
It’s common to appoint two executors but you can have up to four. Executors can be friends or family or a professional person, such as a solicitor.
Once you have decided how you’re dividing your estate, the Will will need to be written. You can write your Will yourself but as it’s easy to miss out important details, it’s a good idea to have your Will written by a lawyer, charity or bank. You then need to sign the Will along with two independent witnesses, neither of which can be beneficiaries.
How important is a Will?
Making a Will is essential for avoiding complications for your friends and family after you die. As we’ll discuss in more detail below, if you don’t leave a Will there are certain rules which dictate how your estate is distributed, which might not align with your own wishes.
You can also use your Will to set out certain requests. For example, if you have children under 18, you can specify who you’d like to become their guardian in the event of your death. You can also offer guidance on your funeral and provisions for your pets.
What happens if you die without a Will?
If you die without a Will, your estate is shared out according to the rules of intestacy, which apply in England and Wales. These rules are as follows:
- Partners who aren’t married or in a civil partnership won’t inherit anything.
- Partners who have separated informally can still inherit.
- If there’s surviving children, grandchildren or great grandchildren and the estate is valued at more than £322,000, the partner inherits that first £322,000 and half of the remaining estate.
- If there’s no surviving children, grandchildren or great grandchildren, the partner inherits all of the estate with interest.
- Children inherit the whole estate if there’s no surviving married or civil partner.
- Grandchildren and great grandchildren won’t inherit unless their parent or grandparent dies before the interstate person.
- Adopted children (including step-children who have been adopted) will inherit but otherwise, you have to be a biological child.
- If there’s no surviving married or civil partner, children, grandchildren or great grandchildren, then parents, siblings and other relatives can inherit.
- If there’s no surviving relatives, the estate goes to the Crown. This is known as bona vacantia.
How much does it cost to have a Will made?
The price of a Will varies depending on a number of factors, such as whether you write it yourself or you get it professionally written by a solicitor. While writing a Will yourself is free, as mentioned above there is potential for errors, especially if you don’t have any legal expertise.
However, there are some free templates available online, as well as other cheap or free Will options.
If you do decide to hire a solicitor to draft your Will, the cost will vary depending on the legal firm so it’s worth comparing a few different ones.
Alternatively, every November participating solicitors will write a basic Will free of charge and instead invite clients to make a voluntary donation to Will Aid, a partnership between the legal profession and seven UK charities.
Are debts included in Wills?
In the UK, if a relative dies, you don’t inherit their debt so it’s not included on the Will in the same way their assets are. However, if the deceased has any outstanding debt, it’s the executor’s responsibility to pay this off using their estate.
This could include liquidating assets such as property or valuable vehicles. Therefore, the amount available on the Will could be reduced after debts have been paid off.
If you are struggling with debt, visit MoneyHelper for free debt information and advice. Alternatively, you can get in touch with us and one of our experts will be happy to assist you.
