In today’s article, we will discuss Succession Law: The Importance of Having a Will.
Although we might not like to think of it, death is an inevitable fate for us all. When we pass away, our families will go through a stressful and traumatic time as they come to terms with their loss. At the same time, there is a requirement for the administration of our estate, and this usually bestowed upon a close relative or friend during this already painful time. However, a lack of foresight and planning can be catastrophic, leaving behind a tangle of assets and liabilities and possibly a hefty inheritance tax bill, depending on jurisdiction. On top of that, the absence of a will can mean a distribution of assets by standard ‘default’ rules, rather than by your individual preferences. In this article, we will look at some standard provisions in the absence of any will, and aim to justify the benefits of making a full and transparent intention during your lifetime.
Most jurisdictions will bear some liability to tax on death. It can be a specific problem for the administrators of estates. Usually, close friends, who must ensure every known asset and debt are accounted for before making legacies and signing off the tax bill. A major problem comes with the personal responsibility attributed to the administrators, which means that should anything ‘slip through the net’ which later discovered, there may be an increased liability to tax. In practical terms, this could mean a surprise bill for several thousand which has already been distributed in legacies and for which the administrator must personally account. Providing for these outcomes in a will is one of the best ways of avoiding this hassle and stress, and it can also be the best way to ensure all assets and liabilities uncovered. By drafting an effective will, you can be sure your loved ones don’t face financial hardship after you’re gone.
In the absence of a will providing specifically for the administration of a deceased’s estate, it is up to the laws of intestacy to determine what happens to the entirety of our worldly possessions. Unfortunately, this doesn’t usually correspond with the way we’d like things to turn out. For example, in some jurisdictions, there are automatic provisions for spouses and kids, meaning you can disinherit, even with a will. There is also usually a default order of preference of who gets what and how much they get, which doesn’t necessarily match your favorite relatives, or correspond to actual family set ups. In fact, cohabiters might run into problems getting anything, including the house in which they live without proper testamentary provisions in their favor.
As you can see, there are some apparent benefits to drafting a will during your lifetime. Sadly, many thousands of people die each year without making these provisions, and it is a real headache for their friends and relatives who left with the burden of a fair settlement. Intestacy causes hostility and stress, which can be readily avoided by just merely making a written will. If you haven’t made a will, it is probably a good idea to make an appointment as soon as is convenient with a legal adviser to do so, to ensure your family is provided for as you would intend and to promote a favorable distribution of your estate on death.