When planning your estate in the UK, creating a Will stands as a crucial step. However, many people are often surprised to learn that they can’t distribute everything they own through their Will. In this guide, we’ll explore what you can and can’t include in your Will under UK law, helping you ensure that your final wishes are carried out effectively.
A Will serves as a powerful document, allowing you to specify how you want to distribute your assets after your death. Nevertheless, it’s essential to understand that certain types of property and assets follow their own rules and may pass independently of your Will. By recognising these distinctions, you can create a more comprehensive estate plan and avoid potential confusion or conflicts for your beneficiaries.
Assets You Can Include in Your Will
Generally, you have the freedom to distribute most of your individually owned assets through your Will. These typically include:
1. Personal property (such as jewellery, furniture, and vehicles)
2. Real estate owned solely in your name
3. Bank accounts in your name only
4. Investments and securities held individually
These assets form the core of what most people consider when creating a Will. They represent the items you’ve worked hard to acquire throughout your life, and you have the power to decide who receives them after you’re gone. For instance, you might choose to leave your vintage car collection to your nephew or your family heirloom jewellery to your daughter. Your Will serves as the perfect place to make these wishes known.
Assets That Cannot Be Included in Your Will
While you enjoy considerable freedom with your Will, several types of assets pass outside of it due to their unique nature or legal status under UK law. Let’s delve into these in detail:
1. Jointly Owned Property
In the UK, how you own property jointly with someone else affects its distribution after your death. There are two main types of joint ownership:
Joint Tenancy: In this arrangement, each owner has an equal right to the entire property. When one owner dies, their share automatically passes to the surviving owner(s), regardless of what the Will states. This is known as the “right of survivorship.” For example, if you and your spouse own your home as joint tenants, and you pass away, your spouse would automatically become the sole owner, even if your Will specifies otherwise.
Tenancy in Common: Here, each owner holds a distinct share of the property. You can pass your share through your Will. This allows for more flexibility in estate planning, especially if you want your share to go to someone other than the co-owner.
If you wish to leave your share of jointly owned property to someone other than the co-owner, consider changing the ownership from joint tenancy to tenancy in common. In the UK, this process is called “severance of joint tenancy.”
2. Pension Benefits
Many UK pension schemes set up their benefits to be payable at the discretion of the scheme’s trustees. As a result, these benefits typically don’t form part of your estate and aren’t controlled by your Will. However, you can usually nominate preferred recipients by completing an “expression of wish” form. Therefore, it’s crucial to keep these nominations up to date to ensure your pension benefits go to your intended beneficiaries.
3. Life Insurance Policies
If you’ve written your life insurance policy in trust or it has a named beneficiary, the proceeds will go directly to the beneficiary, bypassing your estate and your Will. This arrangement can offer advantages for tax planning purposes, as it keeps the insurance payout separate from your taxable estate.
While we don’t offer financial advice, we can refer you to trusted financial advisors who can provide comprehensive guidance on managing your financial products.
4. Assets in Trusts
When you place assets in a trust, the trust document, not your Will, governs them. For instance, if you’ve created a discretionary trust for your children, the trust’s terms will determine its distribution, not your Will. Trusts can serve as powerful tools for estate planning, offering more control over how and when you distribute your assets.
5. Nominated Property
In the UK, you can make statutory nominations for small deposits (up to £5,000) in friendly societies and industrial and provident societies. These nominations take precedence over your Will. While this applies to relatively small amounts, it’s still important to be aware of these nominations when planning your estate.
6. Foreign Property
Local laws may override your Will’s provisions for real estate located outside the UK. Consequently, if you own property abroad, it’s crucial to consult with a solicitor familiar with that country’s laws to ensure proper estate planning. You may need to create separate Wills for different jurisdictions to effectively manage your international assets.
Special Considerations
Deathbed Gifts (Donatio Mortis Causa)
Under UK law, deathbed gifts are conditional lifetime gifts that become effective upon death. They differ from Will bequests and can complicate estate distribution if not properly documented. While these gifts can allow for last-minute changes to your estate plan, you should use them cautiously and with proper legal guidance.
Digital Assets
Digital assets, such as cryptocurrency or online accounts, represent a relatively new consideration in UK law and may require special handling in your estate plan. To address this, create a digital asset inventory and include instructions for accessing these assets in a separate document referenced in your Will. This approach ensures your executors can locate and manage these increasingly important assets.
The Takeaway
Creating an effective Will in the UK requires a clear understanding of what assets you can and can’t control through this document. By recognising these distinctions, you can develop a comprehensive estate plan that accurately reflects your wishes and minimises potential conflicts or confusion for your beneficiaries.
Remember, estate planning can be complex, and laws may change over time. While this guide provides a general overview of UK law, it’s always best to consult with a qualified solicitor to ensure your estate plan is tailored to your specific situation and complies with current UK legislation.
At A.D.E Wills, we’re here to help you navigate the intricacies of estate planning. If you have questions about what you can include in your Will or need assistance creating a comprehensive estate plan, don’t hesitate to reach out. Give us a call on 01865 507174 or send an email to info@adewills.co.uk. Our experienced team stands ready to provide personalised advice to ensure we carry out your wishes effectively.
Disclaimer: This article provides general information only and does not constitute legal advice. Please consult with A.D.E Wills or another qualified legal professional for advice specific to your situation in the UK.
