Common pitfalls in will drafting and the far-reaching consequences
Writing a Will is an important way to protect your assets and ensure that your loved ones are provided for after you’re gone. However, many people attempt to draft their own Will or turn to unregulated Will writing firms, believing it’s a straightforward process.
Whilst this may seem cost-effective, mistakes or badly drafted, ambiguously worded Wills can lead to serious legal issues, rendering the Will invalid or partially invalid. In turn, this can cause disputes among family members, with people inheriting more or less than the testator had intended and it can lead to costly claims for financial provision from disappointed beneficiaries.
Tom Chiffers, partner and Sarah Arkless, Chartered Legal Executive, both private capital specialists, look at some of the common mistakes made when drafting a Will.
Revocation of earlier Wills
This can be problematic where it accidentally revokes any Wills made for assets in a different jurisdiction and then covers your Worldwide estate.
Executors – invalid appointment or no appointment
Where there is no clause appointing Executors or all have died or renounced and there is no substitutional appointment, the Residuary Beneficiaries are entitled to be appointed as Administrators to deal with the estate. This can cause problems where there is more than one, as they may disagree between themselves as to who is appointed, or they may not act unanimously leaving lots of opportunities for delay with the estate. Administrators cannot act until the Grant has been obtained, unlike Executors, who can act from the date of the Will.
No appointment of Guardians
Where you have infant children and no guardian is appointed, the Court will decide who will take parental responsibility of the child or children. This may not accord with the testator’s wishes and several problems could arise. For example, the child may end up with people they are not close to, it could lead to family disputes, it could be a drawn-out process, and it is possible that the child may be taken into care temporarily until a guardian has been appointed.
Legacies being disproportionate to the estate value
Where a Will includes legacies of set sums of cash, the estate may have significantly decreased and as the payment of those legacies ranks above the remainder of the estate, people who the testator intended to have the majority of the estate may end up with less, or the residue may be exhausted in its entirely meaning that they receive nothing.
Specific gifts
Specific assets may not exist at the date of death, so those legacies will fail, leading to disappointed beneficiaries and an outcome that was not the testator’s intention.
Inheritance tax
Many people neglect to consider the implications of IHT when writing their will, resulting in a larger tax burden that reduces the inheritance available for loved ones.
Survivorship clauses
A survivorship clause is a gift to a beneficiary conditional upon them surviving the testator by a set period of time, usually 30 days. There are two main reasons that survivorship clauses are used:
- To avoid the first estate passing through probate twice in quick succession, saving on administration costs; and
- To impose some control over the eventual destination of assets. This control is only minimal though, considering most survivorship clauses are expressed as 30 days.
While these seem like good reasons to use a survivorship clause, there are potentially negative consequences when thinking about inheritance tax.
A survivorship clause can also create an IHT problem if it overrides the rule of Commorientes – where a couple die together in circumstances where it’s not possible to determine who died first.
Assets passing outside of the Will
Jointly held assets which pass outside of the Will can include property, pensions, savings, investments and life assurance policies. These jointly held assets cannot form part of your Will, despite what you may intend. They will pass to the surviving owner.
It is important to consider who receives these assets when considering distributions under the Will and to make sure your Will writer is aware of these (and all other) assets.
Incorrect familial relationships and descriptions
Stepchildren are not within the legal definition of ‘children’. Therefore, under a Will, where you intend your stepchildren to inherit, they must be named. Likewise with step-grandchildren.
Classes of beneficiaries must be correctly defined – your spouse’s brothers and sisters, for example, will not fall into the definition of ‘my brothers and sisters’ even where you may treat them as such.
Tom Chiffers said: “These are just some of the many problems that can be encountered when making a homemade Will or not receiving professional legal advice. It’s incredibly important to ensure that your Will is legally sound and truly reflects your wishes.”
For more information on Wills, trusts, probate and estate administration, please speak to a member of our Private Client team.
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