What happens if you don’t have a Will?
If you die without a valid Will, your estate is dealt with under the rules of intestacy.
These rules determine who inherits your estate. They don’t know about your family dynamics, your wishes or which possessions are particularly important to you.
For example, in England and Wales, where someone dies married or in a civil partnership and has children, the surviving spouse or civil partner receives the personal chattels and the first £322,000 of the estate, with the balance generally divided between the spouse or civil partner and the children.
That might be very different from what you would have chosen.
It can become particularly complicated where there are:
- Children from previous relationships
- Stepchildren
- Unmarried partners
- Second marriages
- Jointly owned assets
- Family businesses
- Significant investments or pensions
- Children or other beneficiaries who may need additional protection
A Will gives you the opportunity to set out who you want to benefit from your estate and who you want to deal with your affairs after your death.
It can also help reduce uncertainty and potential disputes for your family at an already difficult time.
A Will isn’t just about money
When people think about inheritance, they often think about houses, savings and investments.
But personal possessions can be just as important.
Jewellery, photographs, collections, family heirlooms, tools, classic cars and other personal items can have significant sentimental value, even if they have relatively little financial value.
Without clear instructions, family members may have different expectations about who should receive particular possessions.
A properly prepared Will allows you to make your wishes clear.
What about a DIY Will?
There are plenty of inexpensive Will templates and online services available.
The attraction is obvious. You can download a template, fill in the details and feel as though you’ve ticked another job off your list.
The problem is that a Will is a legal document, and getting the details wrong can have serious consequences.
For example, there are specific legal requirements around signing and witnessing a Will. A mistake with the execution of the document can mean it isn’t valid.
The wording also matters. An unclear instruction, an incorrect name or a Will that doesn’t take account of your particular family circumstances can create difficulties for your executors and beneficiaries.
There is also the wider question of Inheritance Tax and estate planning.
A Will on its own doesn’t automatically reduce an Inheritance Tax bill, but proper estate planning can help you understand what reliefs and exemptions may be available and how your assets are likely to be treated.
For anyone with a more complicated family situation, significant assets or a business, it is particularly important to consider getting appropriate legal advice rather than relying on a standard template.
Inheritance Tax is changing too
Inheritance Tax planning has become increasingly important because the rules around estates and certain assets are changing.
The standard Inheritance Tax nil-rate band is currently £325,000 and the residence nil-rate band is up to £175,000, subject to the relevant conditions. The residence nil-rate band can apply where a qualifying home is passed to direct descendants, and it is tapered for estates worth more than £2 million.
The standard rate of Inheritance Tax is 40% on the part of an estate that is taxable above the available thresholds and after applicable exemptions and reliefs.
The rules are not simply about the value of your house or bank account, either.
Your estate can include a wide range of assets, and the way those assets are owned and passed on can affect the tax position.
Business owners need to take particular care
If you own a business, changes to Business Property Relief may be particularly relevant.
From 6 April 2026, 100% Business Property Relief and Agricultural Property Relief is available on the first £2.5 million of qualifying combined agricultural and business property, with qualifying value above that generally receiving relief at 50%. The £2.5 million allowance can also be transferable between spouses and civil partners in certain circumstances.
This means business owners should not assume that their business will automatically pass to the next generation without an Inheritance Tax consideration.
The interaction between your business, your Will, ownership structure and wider estate can be complicated, so professional advice is particularly important if you have a significant business interest.
Don’t forget your pension
Pensions are another important part of estate planning.
Historically, pensions have often been treated differently from other assets when considering Inheritance Tax.
That is changing.
From 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of a person’s estate for Inheritance Tax purposes.
There are exceptions, including certain death-in-service benefits and some other specific arrangements, so it is important not to assume that every pension will be treated in exactly the same way.
This makes it particularly important to understand:
- What pensions you have
- Who you have nominated to receive pension benefits
- How much is currently held in your pension
- How the pension could interact with your wider estate
- Whether your Will and wider estate plan still reflect your wishes
This is an area where an accountant, financial adviser and legal adviser may all have different but important roles to play.
Why an LPA matters
A Will deals with what happens after you die.
A Lasting Power of Attorney, or LPA, deals with what can happen during your lifetime if you are unable to make decisions yourself.
There are two types of LPA:
- Property and financial affairs
- Health and welfare
A property and financial affairs LPA can allow someone you trust to deal with things such as bank accounts, property, investments, pensions and bills on your behalf.
This is important because being married or having adult children does not automatically give someone the legal authority to manage all of your finances if you lose mental capacity.
An LPA has to be made while you still have the necessary mental capacity to make it.
If you lose capacity without having an LPA in place, your family may have to apply to the Court of Protection before they can make certain decisions on your behalf. This can be more time-consuming and expensive than putting an LPA in place in advance.
An LPA and your pension
This is particularly relevant as the rules around pensions and Inheritance Tax change.
A property and financial affairs attorney can deal with pensions and other financial matters within the authority given by the LPA.
The important point is that an LPA isn’t a way of avoiding Inheritance Tax. Instead, it is about making sure someone you trust can manage your financial affairs if you are unable to do so yourself.
That could become particularly important where decisions need to be made about investments, pensions, property or other assets.
Your estate plan should be reviewed when your life changes
A Will isn’t something you should write once and then forget about.
Your circumstances can change considerably over the years.
You might:
- Get married or divorced
- Have children or grandchildren
- Become a business owner
- Buy or sell property
- Receive an inheritance
- Build up significant pension or investment savings
- Experience a change in your family circumstances
- Become responsible for someone who needs additional support
Your Will and LPA should reflect your current circumstances and wishes.
So, what should you do?
You don’t need to wait for a major life event to review your estate planning.
A useful starting point is to make a list of:
1. Your assets
Think about your home, savings, investments, pensions, business interests and valuable possessions.
2. Your liabilities
Include mortgages, loans and other debts.
3. Your beneficiaries
Who would you want to benefit from your estate?
4. Your Will
Do you have one? Is it still valid? Does it reflect your current wishes?
5. Your LPA
Have you appointed someone you trust to deal with your finances and welfare if you cannot make decisions yourself?
6. Your pension nominations
Check who you have nominated to receive your pension benefits and whether those nominations still reflect your wishes.
7. Your Inheritance Tax position
Consider whether your estate could be subject to Inheritance Tax and whether any reliefs or exemptions may apply.
Don’t leave it until it’s too late
Estate planning isn’t just something for wealthy people or those approaching retirement.
It is about making sure the people you trust can deal with your affairs and that your assets are passed on in accordance with your wishes.
The rules around Inheritance Tax, business assets and pensions are changing, which makes reviewing your arrangements particularly important.
You don’t need to have all the answers yourself. A solicitor or appropriately qualified Will and estate-planning professional can help with your Will and LPA, while your accountant and financial adviser can help you understand the tax and financial implications.
The important thing is to start the conversation.
A note from Accountancy Solutions
We’d like to say a big thank you to Secure Inheritance Legal Services for their support and for sharing their knowledge with us when putting this article together. Their expertise in Wills, LPAs and estate planning is a useful resource for anyone looking to review their arrangements. Drop me a line if you would like to be put in contact with one of their team.
Please note: This article is for general information only and does not constitute legal, tax or financial advice. Estate planning and Inheritance Tax can be complex, and the rules and your circumstances can change. You should seek appropriate professional advice before taking action.