If you die without a will all your property (both business and non-business assets) will be distributed under the laws of intestacy – and you and your loved ones will have no say as to where your assets end up.
Rob Martins of Cheesmans Accountants, says that generally, anyone over 18 and of sound mind can make a will. The will should include instructions in relation to your money – including pensions, insurance policies and shareholdings – property and personal possessions together with details of your executor(s) and beneficiaries.
If you do not make a valid will, then anything you own will be distributed in accordance with the intestacy rules. Via this method, the first person entitled to receive your property is your surviving spouse/civil partner if you have one.
However, they may not inherit the whole of your estate – that depends on the size of your estate and which blood relatives survive you. Any assets held (in joint names, as joint tenants or tenants in common) will automatically be passed directly to the other joint owner(s) upon your death and therefore does not form part of your estate.
If you die without a will and do not leave behind a spouse or children, then your estate will be passed to your parents, then brothers and sisters (or their children if deceased) then grandparents, then aunts and uncles of the whole blood, then aunts and uncles of half-blood, then the Crown.
Making a will
There are several ways to make a will, including writing one yourself on a plain piece of paper, but the most recommended way is to seek professional help. The professionals can advise on Inheritance Tax and Trusts, and ensure the will is valid. They may also store your original will at no additional cost.
There are only two ways to change a will and they are:
· Making a new will thereby revoking the old one; or
· Making a codicil
A codicil is a supplement to a will and outlines changes you wish to make. The codicil is executed and signed in the same way as a will. If, however, you have complicated changes to make, then writing a new will altogether is advised.
If you own part of, or the whole of, a business, then making a will is essential. Suppose you are a majority shareholder but die unexpectedly without a will. Your shares, and therefore, majority ownership of the business would be subject to the intestacy rules. If you are not on speaking terms with the inheritors or they do not understand the affairs of the business, a number of things could wrong. The shares could be sold, the business could be broken up or it could fall apart without the correct day-to-day running in place. If shares are split between your spouse and children, this could make things very difficult as the children might not be old enough to make business decisions. A will, therefore, can set out who you want your business (or shares) to go to. This can ensure the smooth running of the business after your death.
When to make a will
It is common to think that a will is not needed if you’re young or don’t have much of an estate, however, the sooner you make one, the better. If you are married or have children or look after dependents, then it is important to make sure they are properly taken care of when you are no longer around. If you wish to leave anything to charity, this will need to be stipulated in a will. You can also make funeral arrangements and stipulate what you want to happen to your body.
In other words, a will can cover almost everything so if you want to have any say in what happens to your possessions or yourself after death, then a will is one of the most important documents you can ever have.