Not having a Will at all
If you pass away without a (valid) Will, this is known as dying “intestate”. Subject to whether the laws of any other jurisdictions apply, if you die intestate in England and Wales, your estate will pass according to specific rules – the “intestacy rules”.
There are two key issues with this:
(a) the estate may pass in such a way that would not have been in line with your wishes; and
(b) the estate may be subject to a greater inheritance tax (“IHT”) bill, the availability of IHT exemptions and reliefs not having been maximised.
For example, where you are survived by your spouse and children, the rules provide that the spouse takes all of your personal possessions and a statutory legacy of £270,000. The residuary estate is split in half: your spouse being entitled to 50% and your children to the other 50%. In most cases, the assets passing to your spouse would be exempt from IHT, but IHT would be payable on the share received by your children.
In the above example, your spouse may be able to request for your home to be transferred to him/her as part of his/her share. This is subject to certain procedures which, if not followed or if the property needs to be sold to realise each beneficiary’s share of your estate, may prevent your surviving spouse from remaining in the home.
The easiest way to avoid this scenario is to have a valid Will!
Not having a valid Will
There are various formalities for signing a Will and what appears to be a slight mistake can invalidate the Will.
Incorrect signing and witnessing: You must sign your Will in the presence of at least two witnesses at the same time. Once you have signed, the witnesses must then both sign the Will. It is key that each of the witnesses has clear sight of you when you sign the Will and vice versa. There has been recent discussion on whether “virtual witnessing” is possible, on the basis that you and your witnesses need only be in each other’s visual presence. To avoid uncertainty on this point, the UK Government is introducing legislation to enable Wills to be signed and witnessed by virtual means. The legislation is initially intended to apply to Wills executed between 31 January 2020 and 31 January 2022, although this period may be shortened or extended. We would, however, recommend that your Will is signed and witnessed by you and your witnesses in each other’s physical presence and only witnessed virtually where this is not possible.
Who can be a witness? It is best practice for a witness to be independent (for example, not a family member or executor). In particular, a beneficiary or the spouse/civil partner of a beneficiary under the Will should not act as your witness, as this will invalidate any gift made to that beneficiary. A witness must be aged 18 or over and of sound mind.
Substantive invalidity: Generally, a Will is invalid if you do not have “testamentary capacity” at the time of signing. Broadly, this means that you must understand the extent of your estate, the effect of making and entering into your Will and any claims that you may need to take into account. There is usually a presumption that you have sufficient capacity to enter into a Will. If there is any doubt over your capacity (for example, because of your age or mental state), you should obtain an opinion from a medical practitioner, and/or ask them to act as your witness to evidence that you had capacity at the time of making your Will.
“Undue influence” by another person may also invalidate your Will, even if you do have testamentary capacity. For example, someone may put pressure on you to make a Will on terms that are not in line with your wishes. It is therefore sensible for you to take legal advice when making a Will and at some stage in the process to discuss and confirm your instructions with your solicitor alone.
If you make a new Will and it is invalid, your estate may be dealt with by an earlier, valid Will, or otherwise under the intestacy rules.
Not updating your Will
Major life events: It is important for you to consider updating your Will after any major life events such as marriage, having children, divorce, or the death of a loved one. Similarly, if there are any significant changes in your assets (for example, on the sale of a business or the purchase of a new property), the Will may need to be updated to deal with the new assets.
Marriage/civil partnership: Unless made in contemplation of the marriage/civil partnership, a Will is automatically revoked by a marriage/civil partnership. It is important to ensure that a valid Will is in place after the marriage/civil partnership to avoid the application of the intestacy rules.
Incorrectly updating your Will
Manuscript amendments: You should avoid making manuscript amendments to your Will after you have executed it, as this may invalidate the Will. If manuscript amendments must be made, the changes must be confirmed by you signing alongside the changes and the witnesses witnessing the changes (i.e. the same signing formalities must be used as if you were executing a new Will). It is, however, always better to set out any changes in a new document, either as a codicil or in the form of an entirely new Will.
Multiple Wills: If you validly execute two or more Wills (for example, to deal with assets in different countries), the general rule is that the most recent Will takes precedence where there is an inconsistency between it and any previous Will. This could result in you accidentally revoking an earlier Will. If you want to ensure that multiple Wills work in conjunction with each other and that there is no accidental revocation of all or any part of a Will, a new Will should contain clear wording as to what (if any) parts of a previous Will are revoked and what assets the new Will is intended to cover.
Failing to deal with your entire estate
If you fail to deal with your entire estate in your Will, this is known as partial intestacy. The assets which are not governed by the Will are instead distributed under the intestacy rules. This may occur if a residuary gift in the Will fails, for example, because the intended beneficiary predeceases you and there is no alternative provision to say who should receive the gift in this event.
To avoid this, you should consider carefully the assets comprised in your estate and include sufficient default provisions in your Will to ensure that your residuary estate is fully disposed of in all circumstances.
Failing to Deal with Overseas Assets
Wills are more complex where your estate is subject to the laws of another jurisdiction – either as a result of your personal status or as a result of you owning assets outside the UK.
In either case, you should take advice to ensure that any overseas aspects of your estate planning are properly considered and dealt with. For example, non-UK assets may pass in line with the succession rules of a particular jurisdiction and these rules may operate in a way which is contrary to your wishes. Obtaining specialist advice should avoid this result.
If you have any queries in relation to the above or more generally on Wills please contact us, or your usual BCLP Private Client contact.
This blog provides a general summary and is for information purposes only. It is not intended to be comprehensive, nor does it constitute legal advice. Specific legal and tax advice should always be sought before taking or refraining from taking any action.