Malcolm Kyle

A staggering 27 million people do not have a will to secure their assets when they die. Are you one of the 27 million at risk from this ‘wills time bomb’?

Death is never a comfortable subject to discuss but frighteningly few of us are planning ahead for the day when it will arrive. Research conducted by the National Consumer Council (NCC) revealed that more than 27 million people in England and Wales do not have a will, leaving their estate wide open. Scarier still, 30% of individuals aged 65 and over — that’s nearly two million people with a life expectancy of less than 20 years — have not made a will.

I know, that you’re probably thinking, “do I really need a Will” or commonly “I’ll get round to it later, as I don’t need to worry about this for a while”.

To answer the first point Basically, if you have children or something to leave, then you should make a will.

Property-owners who are co-habiting should take particular care. Currently, more than four out of five cohabiting couples (83%) do not have a will. Yet despite common misconception to the contrary, unmarried cohabiting couples have no automatic right to inherit their partner’s assets. Your only hope would be to try and claim under the Inheritance (Provision for Family and Dependents) Act 1975.

If you think that sounds like it might be difficult, then you’d be right. Claims need to be submitted within six months of the Grant of Letters of Administration, and even then there’s still no guarantee that you’ll succeed. You will also need a solicitor to fight your corner, which could be very expensive.

A scarier example still is if you are separated but not divorced. In this circumstance your surviving spouse could end up with the keys to your house, even if your relationship has already ended.

Property listed as ‘joint tenancy’ as opposed to ‘tenants in common’ passes on by survivorship, not by will. So if the house is still in joint names and you die, then your unwanted partner should be entitled to the whole property simply because they have survived you.

Money, Money, Money

Under Intestacy laws in England and Wales, if you have no will but were married and your estate is worth £125,000 or less, then everything will go to your husband, wife, or civil partner.

Things get slightly more complicated if your estate is worth more than £125,000. Spouses and civil partners receive just £125,000, or £200,000 if there are no children, along with personal items, such as household articles and other items used for personal use.

The balance is then split between other surviving relatives – so the danger is, if your family home is worth more than £125,000, it may have to be sold in order to pay out these relatives, potentially leaving your spouse homeless.

And, if you are unmarried and have no close surviving relatives, in the worst case scenario, your entire estate could even end up going to the Crown.

Protect Your Children

According to the NCC, 79% of parents fail to make provisions for their children before they die.

Yet if you have children under 18 and a guardian is not identified in a will, then the courts could appoint one of their choice.

Scary Isn’t it and I believe most people haven’t made a Will because they are simply unaware of the consequences of not doing so.

How Much Does A Will Cost?

So how much does a will cost? Less than you may think. Naturally, it all depends on your needs, but in most cases, you’ll pay around £100 for a single and between £150 for joint mirror wills (when a couple leaves the same assets to each other).

My prices are fixed and listed

You could of course consider doing it yourself, as there are plenty of choices available however, if you’re dividing up an estate that’s worth a lot more than the paper your will would be written on, then it pays to seek professional help. Sorting out a badly worded will could end up costing your heirs dearly.

You should also ensure your will is kept up to date. I suggest that you review your will every five years or after major life changes such a separation, divorce, or a change in financial circumstances. Changes are especially important if you get married or enter into a civil partnership, as this will revoke an earlier will, unless it is expressly made in contemplation of your marriage/partnership and certain requirements are met.

Finally, it is important that you choose sensible executors (the people you wish to carry out the task of administering your estate after your death).

Many people mistakenly believe that if you are a beneficiary, you cannot also be an executor. This is not true. However, you cannot be a beneficiary (or the spouse of a beneficiary) and a witness to the will.

Death is never a pleasant topic to discuss, but making the right preparations in advance could save you, and more importantly your loved ones a lot of hassle in the future. After all, once you’re dead, it will be too late…

Continue Reading

Life Insurance is probably not the most exciting thing you’ll read today. However, if there are people in your life who depend on you financially, these two words are very important indeed.

You need to ask yourself what would happen if I was no longer around to bring in an income or look after my children? Would my family be able to cope financially? Would my partner manage to keep up with all the mortgage repayments?

If the answer is no, and you care about your family’s well-being, then having a life insurance policy in place is vital. Without one, your family could lose their home at the worst possible moment imaginable.

Yet despite this reality, recent research from Sainsbury’s Life Insurance has revealed that nearly one in two mortgage holders in Britain don’t have their mortgage contributions covered by life insurance. In fact, the findings suggest there are over 7.1 million people with a collective outstanding mortgage balance of £318 billion who have no life insurance to cover this. That’s a staggering amount of people gambling with their families futures.

Youngest are worst

Of course, not everyone needs life insurance. Perhaps unsurprisingly, the Sainsbury’s research revealed that young mortgage holders (18-24 year olds) are the least likely to have life insurance (62% of them don’t). This makes perfect sense, because at that age you’re unlikely to have to support anyone financially, such as a child or a partner.

However, 44% of 25-34 year olds also don’t have life insurance, 32% of 35-44 year olds are also unprotected, and 34% of 45-54 year olds have no cover. These are pretty significant numbers of people who are likely to have a loved one who depends on them financially in one way or another.

If you’re concerned about how much life insurance will cost you, the good news is, it really doesn’t have to be expensive, particularly if you contact me to look for the best deal for you. With premiums for the young starting from as little as £5 a month, there is simply no reason to leave your family unprotected if something happened to you.

And of course, the advantage of taking out a policy when you’re younger is that your premiums will be lower. The simple reason for this is that a claim is more likely to be made under the policy if you’re older because your health is likely to be worse.

If you’re age 20 and you took out a 25-year policy, for example, there’s a good chance you will survive until the end of the policy at the age of 50. But if you’re age 50 and you take out a 25-year policy, although your chances of surviving until the end of the policy are still good, they are lower. So the sooner you take out a policy, the cheaper it will be.

That said, it’s worth bearing in mind that if you’re taking out a policy when you’re older, you may not require your policy to run for as long as 25 years and your outstanding mortgage debt is also likely to be lower – in which case, your total premiums will also be reduced.

Further things to consider

While covering your mortgage costs is important, you might want to take this one step further. After all, even if the mortgage is covered, would your family be able to cope with paying energy bills, food bills, council tax, without you? If you really want to ensure your family will be fully covered, you need to look at covering all your expenditure.

It’s also worth noting that if you’re buying as a couple, a joint policy usually works out to be cheaper than buying to single policies. However, the problem with this is that it won’t give you as much cover as two single policies because it will only pay out once – when the first person dies, leaving the survivor without any cover. On the other hand, two single policies will pay out twice, so you’re effectively getting double the protection, and they rarely cost double the price.

Life Insurance may indeed be a boring term – but it’s a vitally important one

Continue Reading