UK: The Dangers Of DIY Wills

Last Updated: 10 March 2016
Article by Oliver Embley

The popularity of DIY will kits has arguably led to a significant increase in work for contentious probate solicitors.

For a will in England and Wales to be valid, it must be in writing and signed by the person making the will (the testator), in the presence of two independent adult witnesses.

Where there is no valid will, a person's estate will pass under the intestacy rules on their death. These are government-prescribed rules setting out who should inherit, dependent on which family members survive the deceased, and can be at odds with how the deceased would have intended their estate to pass.

For example, for a spouse with a young child whose estate is worth £1m, the surviving spouse would inherit £625,000 plus personal possessions, and the child would inherit £375,000 at age 18. Not only does this create an inheritance tax problem, it also means that the child has access to significant funds at an early age. Writing a will is nearly always preferable to relying on the intestacy rules.

Revocation

An often overlooked point is that a will is revoked when a testator marries, unless it is drafted so as to be made 'in contemplation' of a forthcoming marriage. Strangely, divorce does not revoke a will, but the divorced spouse will be treated as if they had died, which may have unintended consequences. Testators in either case should remember to review their wills in these situations.

It is surprisingly common for wills to be accidentally revoked where a testator makes their will in the UK and subsequently makes a will in a foreign country intending to deal with their assets situated there. Unless the foreign will expressly states so, it will revoke the UK will. It is therefore important that UK and foreign legal advisers have a joined-up approach.

European assets

The law of succession differs across EU states – for example, countries such as France and Spain have 'forced heirship', where a fixed percentage of assets must pass to a spouse, child, or other relative, whereas, under the law of England and Wales, individuals can leave their estate to whomever they wish. Foreign law can take precedence over the provisions of an English will where the testator has foreign connections, meaning that foreign assets might not pass as the testator intended.

In an attempt to avoid conflicts of succession law in EU states, the European Union Succession Regulation (known as Brussels IV) came into force on 17 August 2015. Brussels IV allows a testator to make an election for the law of their nationality to govern the succession to their assets situated in EU states to which Brussels IV applies (all of the EU except the UK, Ireland, and Denmark).

For example, if an English testator has a holiday home in France and includes an election in their will for the law of England and Wales to apply to their estate, the succession to the holiday home will be governed by the law of England and Wales and can pass to whomever the testator choses, rather than being subject to French forced heirship.

It is important that those with EU assets take advice on how Brussels IV affects them and whether an election should be included in their will.

Digital assets

People are increasingly holding valuable assets digitally, but the law has failed to keep pace with technology. Digital assets can be monetary – for example, Bitcoin or eBay and PayPal accounts – or contain valuable intellectual property rights, such as blogs, domain names, digital artwork, or online literary works. Such assets form part of a person's estate and can pass under their will.

However, email, social media, and music library accounts may be used under licence (as with iTunes), meaning they are not strictly 'assets' which can pass under a will. Whether it is possible to gift such accounts under a will depends on the terms and conditions of the relevant internet service provider. Apple, for example, will delete accounts of deceased users following notification of their death, but the company has introduced a 'family sharing' facility where users can nominate others to share purchases.

As the ability to transfer digital assets under your will varies from asset to asset, our current advice is for people to leave a list of their digital assets to be stored with their will and keep that updated so that the executors can identify the relevant assets and take such steps as they can to transfer ownership to those beneficiaries named in the will. This is another area of will making where taking advice is key.

Inheritance tax

It is important to take advice on inheritance tax (IHT) when making your will so that it can be structured in such a way as to mitigate IHT payable on your estate. Every person has an IHT-free amount of (currently) £325,000 known as a 'nil-rate band'. The nil-rate band is reduced by certain gifts made in the seven years before death.

There is no IHT between spouses and civil partners of the same domicile. Furthermore, the nil-rate band is transferable between these persons. The government plans to introduce, from April 2017, a further nil-rate band which attaches to a person's home: a 'residence nil-rate band'. This will be £175,000 per person by 2021 and will apply when a main residence (or the proceeds of sale) is left to direct descendants. Those eligible will therefore be able to benefit from an overall IHT allowance of £500,000 (when added to the existing nil-rate band), so £1m for spouses and civil partners on the second death. While the rules are not yet in force, those affected must keep them in mind.

Challenges to wills

Although the law of England and Wales allows testators freedom to leave their estates to whomever they wish, the Inheritance (Provision for Family and Dependants) Act 1975 allows certain people to make a claim against an estate if they have not received 'reasonable provision' under a will. Those entitled to claim are broadly spouses, former spouses who have not remarried, children, some cohabitants, and anyone financially maintained by the deceased immediately prior to their death.

In the recent case of Ilott v Mitson [2015] EWCA Civ 797, Mrs Jackson disinherited her daughter, Ms Ilott, and left her £486,000 estate to three animal charities. The Court of Appeal held that one-third of Jackson's estate should pass to Ilott regardless. In its judgment, the court took into account that Ilott was on state benefits, the charities did not have a human need for resources from the estate, and Jackson did not seem to have a connection to the charities she named. The case has been much publicised as a warning that your will can be undermined.

Although such inheritance claims cannot be avoided, a good solicitor will advise on how to mitigate them. For example, a confidential letter could be left to executors setting out good reasons why a family member has been excluded, and what to do should a claim be made.

We have seen several significant changes in case law and legislation on will writing over the past year, highlighting the importance of taking advice when writing your will. A DIY will might do the basics, but family members will often pay a heavy price for it at a later stage.

Previously published in the Solicitors Journal Charities & Appeals Supplement (volume 22) Autumn/ Winter 2015

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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