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It has been a difficult time for everyone since Coronavirus disrupted life dramatically back in March 2020. Even so, with the New Year upon us there will still be the usual talk of resolutions and we are often bombarded with messages about the importance of making a will. The main target of this kind of marketing are people who have never made a will, and this makes sense as only around one third of people in Northern Ireland have actually done so, but even if you have already put something in place it is always worth reviewing your arrangements from time to time to ensure that they are in order. It goes without saying that if you experience a significant change in your personal circumstances, such as the death of an intended beneficiary, or if you become aware of a change to the relevant tax rules, you may need to update whatever arrangements you have in place.
There are significant risks if you die intestate, that is, without a will. In that case then you (and your beneficiaries) are relying on the law to decide how your assets should pass on death and this could produce some unexpected results. For example, you might assume that if you die all your assets will pass to your husband or wife absolutely but in fact this is not always the case. Only a proportion of your estate may do so and any balance over the applicable threshold will be shared between your spouse and your children, even if they are young children. If you have no children then your parents or siblings may have an entitlement. Clearly, this is unlikely to reflect your wishes. Many people also intend to leave specific gifts or sums of money to friends or charities and such legacies can only be incorporated by will. Making a will also allows you to choose executors to deal with your estate, and to appoint guardians to take care of your children if you should die whilst they are still minors.
For those with larger or more complex estates, making (and regularly reviewing) a will is a key first step in developing a clear succession plan. This is of particular importance if you have concerns about inheritance tax, or if there are other issues which may need to be addressed, such as the best way to deal with business assets or how to provide for beneficiaries who are suffering from a disability and for whom outright gifts may not be appropriate. In such cases, the use of trusts may be desirable and these may be incorporated into your will itself or set up during your lifetime, with assets being transferred into them in the event of your death.
You should also bear in mind the fact that if you fail to make proper provision for your family or anyone who is financially dependent upon you when you die, then a disappointed beneficiary may be able to bring a claim against your estate. Often, the costs of such claims are paid from the estate, resulting in even greater loss to your intended beneficiaries. Careful planning in the first place can help to minimise the risk of such claims arising.
Given the complexities involved it is important that when making a will or undertaking any estate planning you consult with a specialist solicitor who is able to advise on all of these key areas and help you to make the best possible will in light of your own particular circumstances. It is also worth noting that, under Northern Irish law, there are strict formalities required to be complied with in order for a will to be valid and, unlike the rest of the UK, these rules have not been relaxed despite the ongoing health emergency. It is therefore as important as ever to get proper, professional advice.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Private Client team at Cleaver Fulton Rankin for further advice or information.