Writing Your Will Needn’t Be TaxingPosted on: 01 June 2009 by Gareth Hargreaves
Why should UK residents write a will? Why do so many people put it off and how much does the Government make in Inheritance Tax?
Online wills expert Stephen Cainer, deals with these questions and looks at the future of Wills in the UK.
Most of us prefer not to dwell on the inevitability of our own death. Being genetically programmed to feel immortal, we’ll happily postpone planning for the inevitable if there’s something more cheerful on the agenda.
With admirable pragmatism, the Government is happy to encourage our collective procrastination. Vast amounts of Inheritance Tax (IHT) come the Exchequer’s way from the £50 billion each year that passes from one generation to the next, roughly the same as all the money that passes through Tesco’s tills in a year’s trading.
Around a third of those who die leaving estates that become eligible for IHT won’t have made any attempt to mitigate the situation by taking professional advice and making a Will. After a lifetime of paying tax, they could be major contributors to the public purse after death.
In this respect they will be behaving like the less well-off. The majority of adults don’t have a Will in place*. There’s an obvious correlation with age. The largest potentially intestate group is comprised of young, single adults of both sexes, of whom 88% have not made a Will. Cohabitants follow closely behind; some 83% have no Will.
Separated couples are next on the Chancellor’s ‘Don’t get well soon’ card list, at 72%.
It’s only when we get to the married and divorced sections of society that this percentage drops to 55%. Oddly, widows are the most circumspect group; only 32% of them have no Will. Perhaps age, the trauma of a marital split or death of their spouse has concentrated their minds; perhaps it’s because these categories are more likely to have come within the ambit of professional advisors who’ll have pointed out the error of their ways.
Whatever the reason, there’s a clear indication that we are more inclined to start making preparations for the disposal of our property following our death as we get (a) old enough to have accumulate some material assets (b) more likely to have offspring or dependents and (c) closer to the actual event.
The politically charged and emotive Thatcherite ideal of ‘wealth cascading down the generations’ should always have the proviso, ‘After IHT, it’s more likely to be a spluttering flow than a cascade.’
Notwithstanding this backdrop of denial, apathy and youthful indifference, professionals in a position to advise us are adamant we should all make a Will. These are not, they insist, matters that should be left to the vagaries of dated laws, inexperienced executors and chance. Very few of us know exactly when our time will come. We should care about how the proceeds of our lifetime’s efforts are divided.
This is an essentially altruistic stance, of course. In death, we will be beyond caring. However, most would agree that the satisfaction of knowing, to some extent, how events will pan out after we’ve gone is worth striving toward in the here-and-now.
There is also the more complex matter of exercising some control over events in the present by announcing your intentions for the future. It depends on your approach to sycophancy, gold-digging and patronage. Not everyone wants their relatives and connections to know the contents of their Will; others find it a most useful way of manipulating family support network in their declining years. It is an area famously fraught with the potential for family disagreements. There is a general consensus of opinion to that it’s a good idea to make your final financial plans while you’re still in full possession of your mental faculties.
So what next?
There is a certain amount of fun to be had from keeping the taxman’s hands off a slice of cash that rightfully belongs to our kith and kin, or a favoured charity. That said, how can we attend to the depressing administrative chore of Will-making without slumping into morbid gloom or missing something entertaining on TV - or a bargain on eBay?
On the Internet perhaps?
Perfectly possible. A company known as Totally Free Wills (www.totallyfreewills.co.uk) has hit upon an ingenious way of reducing the cost, time and emotional investment of the Will-making process. The company operates in a secure Internet environment, so the information you provide will be treated as highly confidential. You simply log-on, tick the boxes and get prompted and guided through the legal morass of making a will. It can take as little as half-an-hour
Once you’ve completed the online Will document a local solicitor from the Totally Free Wills panel will cast an eye over it to make sure that it conforms to legal requirements, then store it safely until it’s (how shall we put this delicately…) needed.
Already, I hear the warning bell of scepticism ringing in your mind. A firm of solicitors acting for nothing! A FREE online service where you don’t even have to give your debit card details in advance? Even in the internet age, how can this be? Do they make their money by selling names to list brokers, on-screen advertising, peppering respondents with unwanted-e-mails about impotency and dodgy pharmaceuticals forever?
No. None of these things.
The Totally Free Wills business is run, by some very credible directors, on the premise that most firms of solicitors put a value on their ‘Wills bank’. That is to say, the file of clients’ Wills that most firms hold for safekeeping, holds the prospect of generating fee income as the firm deals with the resulting probate work. Being far-sighted individuals, solicitors know that the bank will eventually pay dividends. They also know that for people who don’t normally have dealings with solicitors, the ensuing correspondence offers the distinct possibility of them becoming the ‘free’ Will client’s ‘solicitor of choice’.
As time passes, there may be a house, business or other property to sell or the need for other legal services, such as dealing with a Local Authority’s claim for continuing contributions to long-term care. In a phrase, panel solicitors are providing a service today in exchange for possible jam tomorrow, when you’re …ahem …(reach for the euphemisms) either debilitated or gone.
There is a proviso. If, in the panel solicitor’s judgement, you affairs are more complex than usual, perhaps because you fall within the group who will be eligible for IHT or some of your assets are outside the jurisdiction of British courts, the firm may contact you. They’ll quote for any additional services they think you might require. Responding to the Totally Free Wills website doesn’t put the respondent under any obligation to accept these additional proposals.
That seems fair enough.
For the estimated 27.5 million procrastinators in England and Wales who have not made a Will of any description, spending half-an-hour online seems like a sound idea. Perversely, notwithstanding our apparent disinterest in what happens to our property after we die, the great majority of us do have fairly firm ideas about the subject when pressed. “I’m leaving mine to The Lifeboats”, “The Red Cross” or “My grandchildren” are common responses. Not if the courts, your relation’s solicitors and the taxman have anything to do with it, you won’t.
If you want the cats’ shelter to take priority over your brother Charlie’s ex-wife and bookmaker, the answer is to make a Will. Doing so quickly, online, free, in the comfort of your home, with the document safely stored with a solicitor, sounds a whole lot better than doing nothing at all.
By Stephen Cainer
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