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As the saying goes, the only guarantee in life is that one day we will all die.  Of course, death is, typically, a time of intense grief and emotional stress, but how we plan for this inevitable moment,  can help the situation be more successfully managed for those who we leave behind. This is why, as advisers, we believe helping clients with this part of their financial planning should play an integral part of their overall long-term strategy. But, here’s why you should need a Will…

What does dying intestate mean?

When a person dies without leaving a valid will, their property (the estate) must be shared out according to certain rules. These are called the rules of intestacy. A person who dies without leaving a will is called an intestate person.

The intestacy rules date back to 1925 and have not been comprehensively reviewed for more than 20 years (when the Law Commission last considered this area of the law).  The 1975 Act has not been the subject of a full review since it was enacted.

According to the Law Commission between a half and two-thirds of the adult population do not have a will and that those who need one most are the least likely to have made one.

Only married or civil partners and some other close relatives can inherit under the rules of intestacy.

It is equally as important to note that if someone makes a will but it is not legally valid, the rules of intestacy decide how the estate will be shared out, not the wishes expressed in the will.

Insuring yourself as an expat

What makes a Valid Will?

This is governed by section 9 of the Wills Act 1837. It provides that no Will shall be valid unless:

  • It is in writing and signed
  • The signature must intend to give effect to the Will
  • Must be witnessed by two or more witnesses present at the same time
  • Witnesses must sign in the presence of the person making the Will

Once signed, the Will must be stored safely and must NOT be marked in any way as this may render it invalid.

The Will must also be updated when your circumstances change such as getting married, as this may also render your Will invalid.

Where do I keep my Will?

Once a will has been made, it should be kept in a safe place and other documents should not be attached to it. There are a number of places where you can keep your Will:-

  • At home
  • With a solicitor
  • At a bank
  • At the Principal Registry of the Family Division of the High Court, a District Registry or Probate Sub-Registry for safekeeping.

When can a Will be invalid or not enforced?

Even if a person has taken the sound precaution of making a Will, it could be invalid for many reasons, for example:

  • First, not signed at all (very common.)
  • Second, not signed in front of two independent witnesses.
  • Not found as no one has any idea where it is.
  • Not found because it was destroyed.  Either by the person who has died or by someone who found it but didn’t like it.
  • And last, it is cancelled because the person had married or civil registered after making the Will.  In these circumstances, a Will is cancelled if it was not obvious that the Will was intended to remain in force.

The rules of intestacy

In the event that a person dies intestate their estate will be distributed based on the individual’s marital status and family position.  The rules are meticulous and provide specific rules for the distribution of the estate.

Who cannot inherit under the Rules of Intestacy?

The following people have no right to inherit where someone dies without leaving a Will:

  • Unmarried partners.
  • Homosexual partners not in a civil partnership.
  • Relations by marriage.
  • Close friends.
  • Carers.

‘Qwerky’ points to remember

  • The intestacy rule allows a 28-day survivorship period.
  • To inherit under the Intestacy Rules a person needs to be aged 18 or over or have married earlier.
  • If a minor inherits the gift will be held on trust for them until they reach the age of 18.  If they don’t reach the age of 18 (i.e. they pre-decease as a minor or die before coming of age) the gift will revert to the persons entitled in the same class or the next class below if no such person in the same class exists.
  • The effect of the Intestacy Rules cab is inequitable and unfair, especially for surviving spouses.  Surviving dependent may be entitled to seek more adequate provisions by making a claim under the Inheritance (Provision for Family and Dependent) Act 1975 or by seeking a discretionary grant from the Crown if the estate passes to the Crown.

Intestacy and the greatest asset of all!

Most people consider their will in terms of the distribution of their assets on their death.  However, what they tend to forget is what will happen to their children? A Will normally appoints Guardians for younger children.   If the Last Will and testament does not exist or cannot be found, the Social Services Department will advise the Court as to whom they consider should be appointed as Guardian.  The last thing you want is your family fighting it out in Courts over who will have your children.  This could cause rifts within your family which will impact your children’s lives for the rest of their life.

Expats and the need for Wills

A UK Will can cover worldwide assets if the other country is a signatory of clause 21 of the Hague Convention.  If they are not then a local Will may also have to be made specifically to cover assets in that country only, but care must be taken to avoid invalidating the main UK Will.  It is important to also ensure that the Will is ‘formally valid’ and is recognised as a Will in each country where there are assets.

Most common law countries (such as the UK) provide that the Will has to be signed by the testator and witnessed by two independent witnesses.  Civil law countries (most of Europe), on the other hand, require either a handwritten Will or a Will that has been drawn up by a notary.

Countries under the Hague Convention agree to recognise Wills drawn up in accordance with the law of the testator’s nationality, residence, or domicile, or the law of the country where the Will is signed.

In certain countries, your UK Will will need to be translated into the local language and registered.

There are a number of points to consider and reasons why you need to get advice on whether you will need an additional local Will.

  • Will your UK Will be recognised as valid in each of the countries where you hold assets?
  • Will the dispositions be overruled by local law?
  • Who will be responsible for dealing with your assets?
  • Will the particular form used create complications in any of the relevant countries and is it better to have one Will covering everything or separate Wills in each jurisdiction where there are assets?

How can advisers add value?

  • Help your clients to understand the serious impact that dying intestate would have on their loved ones.
  • Direct clients to a professional who will ensure their Will is set up correctly and is watertight in whichever country they choose to reside.
  • Advise clients that of the impact remarriage, divorce and children will have on their Will.

Whilst death is a subject none of us looks forward to dealing with, tackling the financial implications of it should not be avoided – the costs of not tackling it head-on are too great, both in terms of finances and therefore in terms of the lifestyle choices a secured legacy can afford the deceased’s loved ones.

Insuring yourself as an expat

About Mike Coady

Mike Coady is an expat expert based in Dubai and is on hand to help with all of the above and more.

Mike is an award-winning money coach and industry leader in the financial sector.

Qualified to UK Financial Conduct Authority (FCA) standards, a member of the Chartered Insurance Institute, a Fellow of the Institute of Sales Management (FISM), a Fellow of the Institute of Directors (FIoD), and featured as a highly qualified Financial Adviser in Which Financial Adviser.

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Blog published by Mike Coady.