Christmas Conversations: Making a Will
Now is as good a time as any to have those important discussions..
With the family gathered together, and thoughts turning to the New Year and plans for the future, Weightmans’ Wills Trusts and Estates team propose that now is a good time to start conversations about estate planning.
Making – or updating – Wills
Many already have a will in place, although research suggests that two thirds of the adult population have not made a will. Making – or updating - a will is important for many reasons, not just tax planning, but it is a task – and conversation – that many find difficult to have.
Part of that reason might be a concern about how to leave resources to adult children.
Historically, many parents would leave their estate equally between their children at a set age: 18 or 21 - but when it comes to financial planning and wills, parents are starting to realise that leaving their entire estate to their adult children in one fell swoop might not be the wisest move.
Some parents are concerned that children are not looking to settle down and may throw away their inheritance on exotic travel or short-term spending, rather than to help with a property purchase or investing for the future. Our clients are telling us more and more that their millennial children – those who reached early adulthood at the turn of the century - don’t seem to have as firm a handling on their resources or plans for the future, as they themselves did at twenty-something.
Considering trust structures
For those clients, we might advise setting up trust structures to cover part - or all - of an inheritance. Trustees - often a family member or close friend or indeed a professional – can be put in place to play an impartial role within the will arrangement. The trustees can verify whether the request to access the inheritance is justified and as the parents intended, ensuring that assets aren’t available directly to a child to spend freely.
It’s not about turning off the tap. Let’s say that the adult child wants to buy a car – or a house. Trustees can decide if this is appropriate and a reasonable request, and consider issues such as who should fund insurance or other running costs. It can help as a check against impulsive or irrational spending.
Likewise, if they start a family, many clients may feel that that is an appropriate time for them to receive a significant financial boost. These views can be recorded in a Letter of Wishes to guide the Trustees at that stage.
Making a Will - whatever your age or circumstances
There is worryingly low interest in writing a will amongst millennials themselves. Research from 2016 showed that only 17% of those aged 18-34 had a Will in place, meaning that when those who have not made a will pass away, they die ‘intestate’ and the State will determine how their assets are distributed in accordance with a set of rules called ‘the intestacy rules’.
Although some may feel that they have no real assets to leave to anyone now, they should consider taking charge of their own wishes, particularly as in the future they may be able to anticipate a significantly different financial picture.
Making a will is something that all adults should consider as soon as possible, even with limited assets. Arrangements can be made to leave something to a partner or other friends, arrangements can be made for a pet and consideration given to how to regulate social media footprints after death. Provision can even be made for future children. Expressions of wishes about funeral arrangements, and who you elect to deal with the administration of your estate, can also be made.
However, perhaps more importantly, things change, whether a Lottery win, a career taking off, or parents or other relatives providing financial help. Getting a will written now will ‘get it over with’ and be one less issue to think about - although a will should always be kept under review.
Lawyers can help identify priorities and options for effective wealth planning, both during lifetime and on death.
Don’t avoid important conversations and leave it up to chance.
For some background on why making a will is important, please see: https://www.weightmans.com/insights/new-year-new-will/