LANDLORDS SHOULD WRITE A WILL
It all sounds a bit morbid.
However, landlords being high net worth individuals need to consider what happens to their property investment assets when the day finally comes and they no longer are around.
What happens if a landlord gets hit by a bus?
God forbid what would happen if one day a landlord stepped out in front of a number 72 bus catapulting him or her straight into the next life.
Firstly, if a landlord has not written a will they would not be alone. Approximately seven out of ten of us haven’t. For this group of landlords they die intestate. At this stage the laws of intestacy apply to a landlords estate which means that a landlords estate including all their buy-to-let properties are divided between a landlords lawful spouse and a landlord’s surviving blood relatives, according to specific rules laid down by Parliament. If there are no living relatives, once an extensive search has been undertaken, a landlord’s money goes to the Crown.
Why landlords should right a will?
Most landlords make a will because they want to direct who receives their assets including their buy-to-let properties following their death. If a landlord does not write a will and a landlord then dies, a landlord has died intestate. Intestacy rules are, of course, made in broad terms and cannot take account of a landlord’s individual wishes. In 1995, the government passed a new measure called the Law Reform Succession Act 1995 which amended the 1975 Inheritance Act. This amendment now means that the vast majority of couples living outside wedlock can now seek financial provisions from the estate of the deceased cohabitee, whilst at the same time it leaves open the claims from a separated wife and dependent children from a previous marriage. It must be stressed that the Act does not automatically give a common-law partner inheritance rights on intestacy, it merely seeks to clarify the standing of such partners. Where a landlord dies suddenly and intestate the administering of a landlord’s estate and buy-to-let properties could be a complicated & contested activity and one where the only winners are the solicitors acting for each party with a potential claim.
Therefore, it is always advisable that a landlord has a will in place to avoid confusion, conflicts and the fact that the landlord’s estate could be ‘eaten up’ by the legal bills of those parties contesting the estate.
What should be included in a landlord’s will?
Before a landlord writes their will or consults a solicitor, it’s always a good idea for a landlord to think about what they want included in their will. A landlord should consider:
- how much money and what property and possessions a landlord has.
- who a landlord wants to benefit from their will.
- who should look after any children under 18 years of age.
- who is going to sort out a landlord’s estate and carry out a landlord’s wishes after their death – that is your executor.
An executor is the person responsible with passing on a landlord’s estate. A landlord can appoint an executor by naming them in their will. The courts can also appoint other people to be responsible for doing this job.
Where should landlords go to get a will written?
Most people still go to a solicitor to get their will written, not necessarily because their affairs are complex but because they do not know where to start or what to do. A solicitor will normally charge a landlord between £50 – £300 for writing a will depending on the complexity and therefore the time taken to draft one. Landlords are always advised to shop around to find the best deal.
This begs the question – “does a landlord need to go to the expense of getting a solicitor to write their will?”
In fact one in every five of us actually writes our own will.
There are numerous legal stationers that produce packs instructing a landlord how to go about writing a will.
The other alternative a landlord has is to use one of the burgeoning websites that provides an online template for landlords to write their will. Those websites charge slightly more than buying a stationary pack but have the advantage that a landlord will have online or telephone support to guide a landlord through the process of writing one.
Should a landlord write their will themselves?
If a landlord’s finances are simple then there is no reason to employ a solicitor. Consumer champion Which? says you should use a solicitor if you have:
• a complicated estate or the way you wish to pass it on is very detailed
• remarried and have children from a previous marriage
• assets outside the UK
• a business
• assets in excess of the inheritance tax threshold
• someone with mental or physical disabilities to look after.
Landlords should remember that once they have made their will, it is important to keep it in a safe place and tell their executor, close friend or relative where it is. If a solicitor makes a landlord’s will, they will normally keep the original and send you a copy. You can ask for the original if they wish to hold it.
A landlord will need to keep their will up to date. A landlord should review their will every five years and after any major change in their life – such as getting separated, married or divorced, having a child or moving house. Any change must be by ‘codicil’ (an addition, amendment or supplement to a will) or by making a new will.
A landlord should always remember to sign their will.
Finally, a landlord should always remember to look both ways when crossing a road and try to avoid the number 72 bus at all costs!
COMING SOON an investigation into inheritance tax and tax planning.