Where there’s a Will – I want to be in it
Gene Hackman’s will has just been released and, despite having a fortune of over £60 million, he left nothing to his adult children. Legal documents suggest his wife, who died several days before him, was the sole beneficiary.
At least they both had wills…
Recent surveys and studies suggest approximately 60% of adults in the UK do not have a will. Without a will, your estate will be dealt with under the laws of intestacy, which means the law decides who inherits your money – and that might not be the legacy you intended.
I have spent the last few weeks discussing wills, estates, trusts and the importance of leaving a legacy with several clients, so this latest news seemed particularly poignant. This always seems to be harder to navigate when families are impacted by a separation or divorce.
Whether you already have a will or are considering updating it, I have listed six key areas to consider, to improve the chances of leaving a successful legacy.
Administration
The first step is to set aside some time to discuss with your partner what you want to happen to your estate on your death.
This can be the hardest step for people who are reluctant to confront their mortality or, in some cases, become superstitious that doing so might even hasten their demise.
A key part of leaving a successful legacy is to ensure the estate can be dealt with easily and that you remove as much complexity as possible. This means making sure you have carefully considered who the executors should be and whether a trust is necessary.
For certain families and estates, trusts can be a great way to safeguard assets for the next generation – although it is important to work out who the trustees should be and whether they have the time and ability to carry out your wishes.
Guardians
If you have young children, you will need to appoint someone to look after them in the event neither parent survives. You also then need a trustee who can manage the estate and provide the guardians with sufficient income to look after them. Several clients have really struggled with choosing the ideal guardians resulting in delaying signing wills for months or in one case, years!
It is important to remember that it is relatively easy to change the guardians or indeed any aspects of your will once it has been signed.
Tax
Given the recent changes announced to inheritance tax being applied to pensions from April 2027, it is even more important to consider how your estate will be taxed on death.
Some of our clients are restructuring their estate to leave personal pensions to their children (currently tax-free) with a view to changing this in April 2027 back to their spouse – to ensure the funds can be inherited tax-free.
We have recently advised two couples to get married to reduce the inheritance tax burden, meaning both the surviving partner and the children are likely to inherit more.
Fairness
Where there is a split family and a remarriage, it can easily lead to a situation where one party is treated unfavourably – particularly when tax is considered.
An up-to-date will ensures a fair and reasonable distribution of the assets. An important part of a will in this situation is to include a ‘Letter of Wishes’ to the trustees, which, although not binding, can provide some guidance as to how you want your estate to be split.
Communication
I also encourage my clients to speak to their beneficiaries to provide an opportunity for them to ask any questions during your lifetime. This helps avoid any painful misunderstandings that cannot be answered after their death.
Daisy Goodwin, the screenwriter and novelist, has spoken emotionally about the pain and feeling of rejection on being deliberately left out of her mother’s estate – despite accepting that her siblings needed the inheritance more than she did.
We recently had a situation in which a client’s adult child pointed out that the draft will was insufficiently clear and was likely to lead to a financial conflict between the client’s partner and the children.
In this case, the solution was to instruct a more experienced probate solicitor, but it highlights the importance of at least having a conversation with your family about your final wishes.
Review
One of the reasons people put off writing their wills is they find it difficult to make what feels like a permanent decision. The key is to remember that life keeps changing and it is perfectly normal to keep your wishes under review. As circumstances and taxation changes, continue to refine or even rewrite your will.
Legal experts have now said that, because Gene Hackman’s wife died seven days before he did, his children could now potentially inherit his fortune, despite not being named in the will.
We will never know if that was what Hackman really wanted, and it continues to surprise me that people with such significant estates leave their fortunes to the laws of intestacy.
If you are interested in learning more about creating a will, you can tune into our new podcast, The Wealthwide Guide: Financial wisdom for dentists.