When discussing estate planning with clients, in particular making their Wills, people often decide to put off making any decisions and say that they know they need to get round to it but they’ll deal with it later. A few of them will come back and address their Wills a few months later, but a large number never do. It is for this reason that the percentage of people dying intestate (without a legally binding Will) in the UK is currently between 60-70%!

Below are two thought-provoking case studies which highlight why it is so important to actually get round to making (and signing!) your Will.

1. Many people think that you only have to think about making a Will as you get older.They would be well advised to consider the case of 35 year old John Lockwood* who died unexpectedly in a car crash. He did not leave a Will. As he was not married and had no children, his entire estate was to be divided between his parents in accordance with the Rules of Intestacy.

John’s father had divorced his mother when he was very young and had since played no part in his upbringing. However, it was John’s mother’s responsibility to trace his father and when they did find him, he accepted his full entitlement of 1/2 the estate.

John’s mother and siblings had to sell his house and all his belongings and then hand over half of the proceeds to his father, who had not even seen him for 20 years.

Had John made a Will, he could have chosen to leave everything to his mother or brother, rather than to his estranged father.

2. Another client of ours, Henry Sommers*, appointed us to extract the Grant of Probate in his mother’s estate. She had left around £20,000 as well as a house, which all passed under her Will to Henry.

After we had completed the probate application for Henry, we asked him whether he wished to arrange an appointment to make his own Will, in light of the substantial inheritance he had received. Whilst he recognised that this would be necessary at some point, he advised us that he first wished to tie up his mother’s estate and that he then planned to propose to his partner of 10 years, Barbara.

Three months later, we received a call from Barbara in floods of tears to tell us that Henry had died suddenly at 52. At the time he died, he had not made a Will, nor had he married Barbara.

This left his long-term partner in a terrible situation, she had no entitlement to his estate and faced homelessness as she was living in Henry’s late mother’s house. We had to advise her that it was his closest relatives, cousins in Australia, that would be responsible for applying for probate as well as being entitled to the estate.

The only chance Barbara had of recovering anything from the estate was to make a claim, once probate had been granted, as a dependent of the deceased.

*All names have been changed to protect the identities of those involved

Not many people will have ever pondered the country of their domicile. Indeed, the vast majority of people living in the UK would doubtless assume that they are UK domiciled by virtue of the fact they live here.

This is not the case, and the implications of falsely assuming that you are UK domiciled can be immense. Not only does a ‘non-dom’ status potentially affect your Income Tax and Capital Gains Tax position, but it also dictates the Inheritance Tax treatment of your estate upon death. Therefore, before beginning any estate planning, domicile should always be established.

In 2010, statistics showed that 11.3% of the UK population is foreign born. Therefore, at least 1 in 10 people could be considered non-domiciled.

So what are the factors that determine domicile?

1. Everyone will automatically be born with a ‘domicile of origin’ which would generally be determined by considering the domicile of your father at the time when you were born. As such, anyone whose parents were born abroad or living abroad at the time of their birth could be considered a non-dom.
2. Once an individual reaches adulthood, it is possible to obtain an alternative ‘domicile of choice’ if for example they are living in a different country to that of their birth.
3. When assessing whether the ‘domicile of origin’ or the ‘domicile of choice’ takes precedence, various factors need to be considered such as the strength of links to each country and how long the individual has been resident in the respective countries.
4. Prior to 1974, women automatically assumed the domicile of their husbands when they married. It may come as a surprise, but this means that any woman who married a non-dom before then could be considered a non-dom herself for this reason.

If you are in any doubt about your status, then it is advisable to speak to an expert, particularly if you fall into any of the categories mentioned above. Please call us on 0800 028 2837 or complete our online enquiry form providing brief details of your circumstances.

It is surprising that one of the groups of people least likely to have an up to date Will are the parents of young children. In fact (according to a recent survey) a staggering 79% of those with children living at home do not have a Will at all!

Aside from the standard complications that can be cause by dying intestate, the absence of a Will when minor children are involved causes further problems as no guardians have been appointed to care for the children. Who then becomes responsible for their welfare?

One might assume that the surviving parent simply acquires responsibility for the child. However, things are not as simple as this. The reason being that the surviving parent would need to have ‘parental responsibility’ over the child for this to happen. This child’s mother would almost always have parental responsibility, but the fathers may or may not. We will not go into detail as to how this is determined but suffice to say that it depends on various factors including whether they are married to the mother and if they are named on the birth certificate.

Many people think that if they were to die, then grandparents, aunts or uncles could just step in and look after any children they leave. This is not the case. If no guardians have been appointed then the children would be placed into the care of social services, pending a decision on who receives permanent guardianship.

Currently, approximately 4 out of every 5 parents are running the risk of assuming that at least one parent will be alive at the time that their youngest child reaches the age of 18. No one likes to think about the possibility that this might not happen, but is it a harsh reality. In fact, every 22 minutes a child in the UK loses a parent.

One of the most responsible things a parent can do for their children is to write a Will appointing guardians to look after them. This is the only way of achieving peace of mind that, should you not be around, your children would be well looked after by people you trust.

The concept of freedom of disposition in a Will, familiar as it is in modern England and the United States, is by no means universal.  In fact, globally, complete freedom of disposition is the exception rather than the rule.

Most civil-law systems (such as France and Spain) put some restrictions on the disposal allowed under a Will, for example; making it compulsory for parents to leave a share of their estate to their children.

For this reason, it is particularly important for those UK domiciled testators who own property on the continent to seek legal advice and ensure that Wills are made in each country in which immoveable property is owned.

A surprising oversight that we encounter regularly is the omission of people’s pets from their Wills.

Approximately 43% of the UK population has a pet at home. Nationally, 22% of people own a dog and 19% have cats. Less popular are hamsters at 1%. But almost all pet owners fail to consider who would take on the responsibility of their pet if something were to happen to them.

It is worthwhile speaking to relatives and friends to find out if they would be willing to take on your companion if necessary. If so, then a simple clause in your Will can make it clear who you would like to care for your pet and make provision for any remuneration you would like them to receive in exchange for doing so.

Some charities offer help if you don’t have anyone able to take on your pet. For example, the Dogs Trust guarantees bereaved dogs a home for life. If the owner is in possession of a ‘Canine Care Card’ then they will promise to care for the dog at one of their re-homing centres for the remainder of its life.

For more information on this topic, please do not hesitate to contact us.