March 2025: Where there’s a will, I want to be in it

Over the last few weeks I have been discussing wills, estates, trusts and the importance of leaving a legacy with several clients.

So I was interested to read the news last week that Gene Hackman had left nothing to his adult children, despite having a fortune of over £60m. Legal documents suggest his wife, who died several days before him, was the sole beneficiary.

At least they both had wills, I suppose.

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 might not be the legacy you intended.

Fortunately, over 95% of our clients have valid, signed wills. Whether they are up to date is another matter.

A significant number of clients, however, have not yet completed their Lasting Powers of Attorney (LPA) – a legal document that allows you to appoint someone you trust (the "attorney") to make decisions on your behalf if you lose the capacity to do so yourself, either for health and welfare matters or for property and financial affairs.

Whether you’re thinking of updating your will, or have a family member or friend you want to encourage to get their affairs in order, 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 with your partner to discuss 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 remove any complexities and ensure the estate can be dealt with as easily 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

Those with young children 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 struggled choosing the ideal guardians, resulting in delaying signing their 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 meaning inheritance tax will be 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 back to their spouse to ensure the funds can be inherited tax-free.

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 can ensure 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 their lifetime. This helps avoid any painful misunderstandings that cannot be answered after your 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 where 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.

The solution, in this case, was to instruct a more experienced probate solicitor but, nevertheless, 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 that 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 and as circumstances and taxation changes, continue to refine or even rewrite your will.

Legal experts have now said that, because 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’ll 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.

As a reminder…

This is what the stock market returns have been over the last month and 30 years.

What we’ve done

We recently advised two couples (both in very long-term relationships) to get married to reduce the inheritance tax burden.

As advisers, we’re always keen to ensure that clients take action with the advice we give, so that’s pretty satisfying.

At the very least, both the surviving partner and the children are now likely to inherit more and remain financially secure.

State Pension top-ups for incomplete years

There’s an important deadline coming up in April 2025 that could affect your future State Pension entitlement.

If you have gaps in your National Insurance (NI) record, you may lose the chance to top them up, costing you thousands in lost pension income.

We strongly encourage you to check your NI record now to see if they have any missing contributions.

After 5 April 2025, the window to make up certain missing years will close, reducing your ability to boost your pension.

If you have less than 35 years, your State Pension will be reduced. If you have less than 10 years, you won’t receive any State Pension at all.

As of the 2024/25 tax year, the full State Pension is £221.20 per week (£11,502.40 per year). Each missing year of contributions reduces your pension by £5.75 per week (£299 per year). Over a 20-year retirement, that’s nearly £6,000 in lost income for every missing year.

The good news is that you may still be able to fill in missing years, but time is running out.

Right now, you can go back as far as 2006 to fill in missing NI contributions. This is a special extension that was introduced on a temporary basis.

From 6 April 2025, you will only be able to go back six tax years, meaning that if you have gaps in your record before 2018/19, you must act before April 2025 or you’ll lose the chance to make up those years forever.

Every year you wait, another earlier year becomes unavailable for top-ups.

How much does it cost to fill gaps?

For most people, the cost of making up a missing year of NI contributions is £824.20 (for 2023/24). It may be significantly less, however, if you have a partial record of contributions in any tax year.

If this adds a full extra qualifying year to your record, it increases your pension by £5.75 per week (£299 per year). Over a 20-year retirement, this could add up to nearly £6,000 in additional pension income – a very strong return on a £824.20 payment.

For some people, particularly those with some NI credits already, the cost may be lower, so it’s worth checking.

To check your National Insurance record – go to your Government Gateway account. You’ll need your Government Gateway login details (or create an account if you don’t have one). This will show you exactly how many full years you have and any gaps in your record.

VouchedFor

You may be familiar with VouchedFor; it's a bit like Trustpilot but for financial advisers and accountants and is the online review site on which we ask all our clients to share feedback on our advice and service. We’re delighted to have qualified again as a 2025 Top Rated Firm.

As a result of all the feedback in 2024, we've also been shortlisted for the following awards:

🏆 Client Trust
🏆 Client Experience
🏆 Client Care (protection advice)

Many thanks again to all those who have completed these reviews for us. It really helps us to see what our clients think of us and where we can improve our service (plus, it gives us the chance to celebrate when we get it right).

Quote

"Only put off until tomorrow what you are willing to die having left undone."

Pablo Picasso

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