It is 2019 and I bet you cannot think of a better way to start the year than with a ‘willanuary’. I hear you ask, what is this strange term and what does it involve? Is it something that requires me to buy new activewear; eat a calorie restricted diet or spend hours each day meditating? No. It is an exercise that only has to be completed once this year.
Last year you might have heard of dryanuary (no alcohol) or veganuary (following a vegan diet) and participated in other events dedicated to particular months of the year. This year appears to have taken a step further and, according to the BBC News, ‘januhairy’ (i.e not shaving during January) is the new thing. Giving up or restricting something when it is wet and cold outside does not sound like a good idea to me. I reckon a positive action, such as a willanuary, has a better chance of taking off than a januhairy and here is why.
If you die without a will (known as intestate) then your estate may not pass to those whom you wish to benefit. There may be additional legal costs to appoint an executor and you may have to obtain a special insurance product (known as a bond of caution). In order to prevent unnecessary stress, cost and uncertainty for family members and loved ones when you die, it makes sense to put in place a will sooner rather than later.
In general terms, a will is used to appoint executors to administer your estate and record how your estate should be distributed in the event of your death. In many circumstances other planning aspects need to be considered such as your pensions, death benefits and your financial or retirement plan. For example, the use of a trust may be required to protect assets bequeathed to young beneficiaries, a beneficiary with a disability or a beneficiary who in receipt of means tested benefits. You may need to consider mitigating inheritance tax or the costs of residential care.
Let us consider an example to illustrate one of the issues above: the unhappy story of Dave and Susan.
Dave did not participate in willanuary last year. He did, however, consider putting in place a will and wanted the majority of his estate to go to his two children when he died. Susan did not need any more money and was living in a residential care home. Dave heard about this thing called legal rights and thought that his children would be able to claim his estate when he died. Dave misunderstood the legal position and decided not to proceed with putting a will in place.
Owing to the value of his estate being within the statutory limits, his wife inherited his entire estate on his death under what is known as prior rights. Dave’s children did not benefit on his death and could not claim legal rights in his estate. Susan inherited Dave’s estate, which meant that she no longer received support from the local authority to fund her care. She is now full self-funding and the capital of her estate is being eroded to pay for her care.
Do not be like Dave. Use willanuary to kick start your ‘life admin’ by putting in place a will. If you do not have a will in place then it may be more beneficial for your mental wellbeing to attend to this, rather than waiting in the lengthy queues at the local gym or being frustrated by learning to meditate. If you already have a will in place make sure that you know where it is. It may be with a firm of solicitors that is no longer trading under the same name or with your mortgage provider. Is it up to date and does it still reflect your wishes?
Is willanuary something that will catch on, probably not, but it does highlight an area that requires consideration. If you have any queries in relation to your will arrangements, please contact our private client team at Gilson Gray who will be able to assist you.
The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.