Even if you have a Will and think you have taken care of things properly, unless your Will is very carefully drafted it could result in your assets being distributed to very different people from those you intended to enjoy them.  95% of the Wills we have examined do not protect the assets in any way at all.  They do not ensure the benefits are really received by the people the person intended. 

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Asking a solicitor to draft your Will does not necessarily guarantee that what you want to happen is what will actually happen.  A solicitor will usually simply act on your instructions, and is not obliged to point out that the end result might not be what you had intended. 

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Example - Wife Loses Income because of Poorly Drafted Will 

 

Philip and Alison lived a comfortable married life with a nice home, an investment property portfolio, some cash and other investments.  This was all owned by Philip, as follows: 

Home    £500,000 

Property Portfolio £2,500,000 

Investments      £50,000 

Cash      £50,000 

Furniture & Sundry Possessions      £50,000 

Total Estate £3,150,000 

Somebody told Philip that he would save Inheritance Tax if he passed everything except the family home to their children, so he wrote his Will to do this. 

When Philip died the Inheritance Tax calculation was: 

Total Estate £3,150,000 

 

   Less Philip’s Nil Rate Band    £325,000 

 

Taxable Estate £2,325,000 

 

Inheritance Tax @ 40%    £930,000 

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As you can see, there was an Inheritance Tax bill on Philip’s death, as the advice he received was not correct.  This had to be paid by selling some of the properties in the property investment portfolio, as there was not enough to cover it in the cash and other investments left by Philip. 

But Alison lost all her income in retirement, which she was getting (through Philip) from the rental income on the property, as this now belonged to the children.  This was certainly not the result Philip intended. 

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Example - Wife loses her home and retirement income 

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This is a true case, not an example made up to illustrate a point.  I have therefore not used any names or figures so it is not possible to identify the couple. 

We met a successful man who had built up a good business that allowed him to buy a nice home and four investment properties.  This man instructed his solicitor to draft “Mirror Wills”, i.e. Wills for himself and his wife that were identical.  In an attempt to avoid Inheritance Tax he had the Wills state that half the home and half the investment property portfolio were to pass to their children rather than to the surviving spouse. 

The couple planned to use the investment property portfolio to provide them with an income in retirement. 

The way the Wills were written meant that when the first of the couple died, the remaining spouse would only own half the home and half the investment required to provide them with an income.  They would therefore lose half their planned retirement income.  They could also be thrown out of their home, or at least forced to share it with some or all of their children or anyone their children decided should live there. 

This otherwise intelligent business man could not believe that a solicitor would have produced a document for him that could result in such a catastrophic disaster.  He therefore refused to believe that this could be the result of the way his and his wife’s Wills were written.  But it was.  The solicitor had not done anything wrong, as he had acted on his client’s instructions and written the Will exactly how the client wanted it written.  But he did not feel it was his responsibility to point out the major disadvantages of writing it this way. 

As you can see, it is very important not only to write a Will but also to write that Will properly so that it achieves what you really want to achieve and in the best and most tax efficient way. 

Example – Caring Daughter Receives Nothing 

Rose was an elderly and infirm lady who had two children, Tyler and Sandra.  As Rose became more infirm, Sandra gave up her full-time job, switching to part-time hours so she could spend more time looking after her mother.  Tyler didn’t even ever bother to visit his mother. 

Rose lived frugally, surviving on her state pension.  She owned a small bungalow, worth around £300,000, and very little else other than around £1,000 or so in the bank. 

As Sandra had given up so much to look after her and Tyler didn’t seem to care at all, Rose wrote in her Will that Sandra should receive her house and Tyler should get the cash.  She felt happy knowing Sandra would receive most of her estate and Tyler would only get around £1,000, which was all Rose felt he deserved. 

As the years went by Rose needed to go into a care home.  She sold her house to pay the care fees.  She did not think to re-write her Will in the changed circumstances.  Rose stayed in the home for two years before she passed away.  On her death there was still around £200,000 left from the sale of her house. 

Rose’s Will said Sandra should receive her house, but as Rose no longer had a house Sandra received nothing.  The Will said that Tyler should receive her cash, so he received £200,000. 

This was very different from what Rose intended!