In this article, we will talk about the most common estate planning mistakes, and the reasons why you should use a professional estate planner.
Thinking you don’t need a Will
It’s not uncommon for people to think that they don’t need a Will, or just presume that their spouse/family will get everything. This is simply not true. If you are over the age of 18, you should consider writing a Will, no matter the size of your estate. If you are to pass away without a Will, it can cause many complications for your family.
Under the Laws of Intestacy, it is true that your spouse/civil partner will inherit your assets, however, it is not as straightforward as that. If you have no children together, your spouse or civil partner will inherit your estate. However, if you have children together, things are a little bit more complicated. Your spouse/civil partner would inherit the first £322,000, all personal possessions, and half of the remainder of your estate, and your children would share the other half of the estate. This could cause a number of issues. One of them is that you may not wish for your children to receive their inheritance at age 18 (which they would under intestacy rules) as it might not be in their best interests to do so.
Drafting your own Will
Writing your own Will sounds like a great option in theory, however, there are certain formalities that must be adhered to for a Will to be valid.
One of the biggest risks of writing a Will yourself is that you make any mistakes that could potentially invalidate your Will, and your wishes will not be fulfilled. This could mean that your family is left with legal and financial issues upon your death, which could’ve been easily avoided. Most DIY Wills do not consider what should happen if any beneficiaries pass away before the testator of the will, which can lead to a partial or full intestacy of the estate. If someone inherits through intestacy that is a minor, they will be automatically be entitled to their inheritance at the age of 18, whereas if the testator had gotten advice from a professional Will Writer, the Will would have contained a trust that held the inheritance until they were older and could use the money more wisely.
One of the main issues with DIY wills, however, is in relation to the execution of the Will. In order for a Will to be valid, it must be signed in the presence of two witnesses. A minor can act as a witness, provided they are mature enough to understand their act. However, it is best to avoid this, if possible. Ideally, witnesses should be completely independent, but this may not be possible in certain situations. It is acceptable for family members to witness the signing of the Will, as long as they are not a named beneficiary or spouse/civil partner of a beneficiary, as this will forfeit their gift. Witnesses must also have the mental capacity to understand their actions.
Lasting Power of Attorney are only for the elderly.
This statement is simply not true. Many people believe that losing mental capacity is related to Alzheimer’s/Dementia or old age. However, you can lose mental capacity at any age, whether that be from an accident or injury, certain mental health conditions, or abuse of drugs/alcohol.
There is also a common misconception that someone’s ‘next of kin’ can make decisions on behalf of a person if that person is incapacitated, this is not the case.
Instructing uninsured Estate Planners
It is highly recommended that you do your research when looking for an estate planner, and make sure that you check their credentials before contacting them for their services or handing over any money. As Will Writing is unregulated, there are many Will Writers out there who do not have any professional training, qualifications, or any fundamental knowledge of estate planning. This can cause a number of issues, such as incorrect or outdated advice, Wills that are invalid or a whole or partial intestacy of an estate.
The Society of Will Writers is a non-profit self-regulatory organisation which seeks to protect the public and serve the interests of those men and women who are active professionals in our field. The reasons for using a member are:
- Members continue to train on a yearly basis doing a minimum of 24 hours
- Members hold professional indemnity insurance with a minimal level cover of £2 million
- Members must adhere to the Society’s code of practice and complaints procedure
- Members are only admitted to the Society after completing a stringent and robust application procedure
- Members offer a statutory cooling-off period of 14 days in accordance with the Consumer Contract Regulations.
All of our estate planners are full members of the Society of Will Writers.
I only have one beneficiary
If you only name one beneficiary in your Will, and they happen to pass away before you, or cannot inherit for any reason, then your estate will be distributed under the rules of intestacy. This could lead to your estate going to a distant family member or the Crown, which may not be what you want. Therefore, it is in your best interests to name a reserve beneficiary. Charities are always a good option, as everything passes free of inheritance tax.
Not being specific enough
If you are too vague in your Will, some gifts might fail due to uncertainty. A Will must state clearly what is being gifted, and who the beneficiary is. This may seem obvious, however, many people still make this mistake. Some examples include, “The bulk of my estate” or “I give £1000 to each of my friends”.
These examples would be too uncertain and therefore would fail. There is no clear definition of “each of” and “the bulk of”. Using classes of beneficiaries is okay, as long as they are clear and can be defined, such as “my children”. Where there is no way of identifying everyone who would be someone’s friend unless stated in the Will.
If you would like to speak to an estate planner, please get in touch with us today! We will answer any questions that you may have about your estate.
Tel – 0800 195 6355
Email – firstname.lastname@example.org