It has taken a global pandemic, but making a will has finally moved into the 21st century.
Since the Wills Act of 1837 — the year in which Charles Dickens’s Oliver Twist was first published — making a will in England and Wales has required the physical presence of at least two witnesses.
From this month, though, the Ministry of Justice has granted a concession allowing video technology to be used to witness wills being signed. The measure is backdated to January 31 2020, covering wills that were witnessed by video under lockdown, and will remain in force until January 2022. However, the MoJ says it should be used only as a last resort when the person making the will — the testator — cannot meet people outside their household.
Embracing technological change is just one way that the world of will making has changed this year.
Plenty of articles in the FT Money archive highlight how easy it is for many people — especially young people — to delay making a will. There is already evidence that Covid-19 has changed people’s priorities, with more of us finally getting around to putting our final wishes on record. Sadly, the pandemic also means that more readers have lost loved ones, and are having to sort through the financial affairs of their relatives and friends.
Here, FT Money pulls together top tips from our readers and legal experts to help your family ensure that your will writing activities — whether offline or online — have the intended effect.
Caught on camera
Farewill, the UK’s largest will-writing organisation, helped write 10,000 wills between May and July, a three-fold increase on the same period last year. Other will-writing organisations and law firms have seen a similar rise in demand.
Lorraine Robinson, head of legal at Farewill, welcomes the video witnessing concession. She says: “We’ve heard from hundreds of customers finding it difficult to get wills signed due to lockdown, isolation and illness.
“This is a step in the direction of a more modern approach to witnessing wills — many of the laws are outdated and archaic. Plus, if we do experience a second wave [of the virus], this provides clarity and a real, safe alternative for a valid will to be made while in lockdown.”
However, she is urging people to be “vigilant” as the new law may not be as simple to follow in practice. “Wet signatures are still required, and all parties must sign the same document together by video link. This requires at least two separate video sessions and the passing of the original document between the parties,” she says.
Wills witnessed through a window or those made in a garden observing social distancing or through an open door were already considered legitimate as long as the witnesses, who are not beneficiaries, had a clear sight of the person signing it.
Oliver Asha, head of legal at Make a Will Online, says his organisation has seen a substantial rise in will writing during the pandemic. Video wills were sometimes a solution for those worried about going out and anxious about visiting neighbours to have their wills witnessed — but he urges caution.
“We would not recommend anyone makes a video will except in the most dire emergencies,” he says. “It is a last resort for people who can see no other way out. There are so many points where you can go wrong.
“People may sign the will outside the line of sight of the camera if they use a front-mounted laptop with the camera pointing at their face. Also, internet connectivity can invalidate the will if the screen freezes during the call,” he adds.
His organisation — which charges £39.50 for a single will and £49.50 for a pair of wills — says it is best to take advice from a qualified solicitor before making a video will. The standard signature page, for example, has to be updated, since it normally says: “Signed in the presence of two witnesses”. The suggested wording for a video signature is “I, (first name, surname), wish to make a will of my own free will and sign it here before these witnesses, who are witnessing me doing this remotely.” Failure to use the appropriate wording could lead to the will being challenged, Mr Asha says.
Rachel Mainwaring-Taylor, a partner at law firm Farrer & Co, agrees that virtual witnessing should only be used as a last resort. “The need for up to three separate video calls to execute the will and to transport the original document between the testator and witnesses so that everyone can sign the document physically is likely to cause delays and increase the risk of something going wrong,” she says. “The will is not valid until the testator and witnesses have all signed physically.”
Regular updates needed
Writing a will is not a final act. It is the first stage in helping your family and beneficiaries get what you want them to receive as quickly as possible. Many people make a will when they buy their first home, get married or have children — but then do not get around to making any changes.
FT readers have related their experiences of dealing with estates as executors. Their most important tip is to regard the will as the starting point, as it is a document that may need updating regularly.
Farewill offers an update service for £10 a year, allowing customers to make unlimited updates to their will and their record of financial assets, which they prepare alongside their wills.
Tim, an FT reader, works as a volunteer for the Paperweight Trust which provides free services for those who need help and guidance on legal, financial and welfare issues. He is used to helping those who are frequently overwhelmed by financial and other paperwork following a divorce or the death of their spouse. Sadly, the pandemic means the charity has never been busier.
“Not infrequently, I sort out papers going back many years,” he says. “When you make a will, we advise that you produce a document telling survivors where everything is — including your will and details of assets such as pensions, bank accounts, investments and credit cards.”
Tim says such a list is essential for executors, but it is very rarely written. “One lovely lady I helped in south-east London had been left [by her late husband] a four-drawer filing cabinet full of papers. The documents dated back to the beginning of their marriage 50 years earlier. Nothing was filed properly. It took hours to go through it all, but I ended up with 20 slim files.”
The list should include all assets and, where possible, up-to-date valuations or at least details of the date and purchase price of jewellery or antiques. Investors should leave a note with their will stating where all their share certificates are filed and name the contact they have at stockbrokers for each share.
Ms Mainwaring-Taylor said: “It is helpful to ensure key people have each other’s contact details and know where to find information that will be needed. If information is kept on a computer, the trusted people will need the password to be able to access it. If hard copies are kept in a safe or locked cabinet, make sure enough trusted people have or know the location of the key and or combination.”
A survey by Hargreaves Lansdown last week revealed that only 5 per cent of customers had a register of assets to make it easier for those they leave behind to untangle their finances.
If you have made gifts to children or grandchildren within your lifetime, perhaps to help with a house purchase, these become free of inheritance tax if the donor lives for more than seven years after the gift. However, plenty of readers have stressed that full records of all such gifts, with bank statements, will be needed for executors to prove this.
Farewill has seen the biggest uptick in activity from younger customers. Twelve times as many customers under the age of 35 made wills in April 2020 compared with December 2019, before the pandemic struck.
Farewill says its millennial generation will makers include air miles or other loyalty points in their wills, alongside collections of cookbooks, other sentimental items and gadgets such as laptops and phones — plus their digital assets.
STEP, the professional association for practitioners who specialise in family inheritance, warned last month that families needed to think about their digital legacies and make provision for non-physical assets in their wills.
These might include sentimental items such as digital photos, social media content and private information such as confidential emails, passwords and medical items. STEP says we should make a detailed inventory of our digital assets — cloud files, shopping accounts, storage drives and online identities.
Emily Deane, technical counsel at STEP, said: “Having so much of our identities online is something most don’t give a second thought to. But over our lifetimes we now generate huge amounts of valuable, private and sentimental data. We should give thought to our digital legacies.”
Be aware that whatever is written in your will is a public document (you can obtain a copy of a person’s will from the Probate Registry for as little as £1.50).
However, a “letter of wishes” allows you to explain key information, such as why you have omitted a family member from your bequests, without it being published as part of the probate process. By putting the reasons in a letter, it makes it clear that the omission was not by accident. This is useful if there is a dispute about the will later, and should prevent one.
Plenty of readers say they will remember charities in their wills as the inheritance tax rate on an estate can be reduced to 36 per cent from 40 per cent if at least 10 per cent of a person’s taxable estate goes to charity.
This can result in some complicated calculations but overall, “the costs of carrying out the calculations should not be too steep, especially as the software provided to prepare and file the IHT accounts can carry out these calculations,” said Matthew Yates, partner at Hunters Law.
There have been a number of cases in the courts in recent years where children have challenged major legacies to charities. Mr Yates said that contemporaneous notes of meetings need to be part of the records kept with the will to give the reasoning behind the bequest. It may also be necessary to get a medical opinion on the capacity of the will-maker in the form of a letter to be kept with the will.
A final measure for those determined to leave a charity legacy might be to include a “forfeiture clause”, so that if a beneficiary challenges a legacy to an organisation or other individual they lose their own inheritance, said Mr Yates.
Some bereaved readers complained that they had been hassled by legacy officers from charities who were chasing the prompt payment of their bequests. This can be avoided by leaving a legacy to charities in general with the instruction that executors make payments according to a letter of wishes accompanying the will. This is not sent to the Probate Registry, which means that charities will not have access to it.
A letter of wishes is also a chance to say a final “goodbye”.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, says: “The will is a dry and legal document, so will bring no comfort to your loved ones. The letter of wishes is an opportunity to leave a final loving message.”
The difficulties of untangling foreign assets
Investors are often unaware that shares or other investments they hold may be registered in jurisdictions other than the UK. This can cause delays and substantial expense. Plenty of FT readers have discovered this when acting as executors.
David, an FT reader, has been working for almost two years to untangle his son’s assets. It has cost tens of thousands of pounds because his son’s investments were complex and widely dispersed. Because of the delays, David has been funding the living costs of his daughter-in-law and grandchildren as he was strongly advised not to distribute any assets before all assets were gathered and probate granted.
David’s son had assets in excess of £5m in the Isle of Man, Guernsey, Jersey, Ireland, Cayman Islands, Spain and the UK where he was resident. The estate included the family home, plus investments in UK and foreign companies including Ucits funds (Undertakings for the Collective Investment in Transferable Securities) — an EU regulatory wrapper for certain types of retail investment funds.
“It appears that no country is prepared to accept a probated UK will without going through a local probate procedure,” said David. This is costly and time consuming and cannot be done in parallel without obtaining UK probate which must come first.
“It is obviously a good ‘money earner’ for these jurisdictions as they all charge a fee, in some cases pro rata to the value of the assets,” he says. “Getting relief from overseas tax paid is by no means certain and expenses are not deductible for UK inheritance tax purposes.”
Guernsey investments are handled through its Ecclesiastical Court, which David says initially refused to acknowledge difficulties in obtaining “ink” signatures during the current pandemic, while the Cayman Islands authorities insist on personal attendance to file at the court, with three local firms quoting $10,000 in fees to handle the matter.
David advises investors to check whether any of their assets are registered in overseas jurisdictions and whether having a local will makes it easier to sell the investments, adding that Ucits can make it “very expensive to hand on assets to heirs”.
Another FT reader, Graham, had difficulty selling his late wife’s shares in Experian and CRH, the Dublin-headquartered construction materials group. The Experian shares, worth £30,000, were registered in Jersey and necessitated paying a solicitor £655 to get an additional grant of probate in the Channel Islands.
The Irish shares proved more complicated to unravel. Graham approached two solicitors to help. “One had a minimum fee of £2,500 to get access to £10,000 of shares; the other wanted a minimum of €4,000,” he says. “There is over 30 pages of information and questions to complete for the Irish probate office. The extra costs and time and effort to get the asset realised following the death of an UK individual is significant, and you are not warned when buying them.”
Peter Double is the founder of Probate Resealing, which specialises in transferring foreign assets owned by a deceased person to executors or beneficiaries. This usually includes the “resealing” of English grants in foreign jurisdictions; and also, if necessary, obtaining the issuing of a new grant of probate in the foreign country concerned.
Mr Double recommends UK investors to hold stocks and shares through a UK stockbroker’s nominee system, which is likely to cost less than £100 a year. This avoids the need to transfer shares to the UK executors after death and facilitates the prompt payment of dividends during the lifetime of the shareholder as well as converting the dividends in a foreign currency into pounds sterling, which saves bank charges.
Real estate can also cause problems. In the US, for example, there can be different legal procedures in different counties in the same state.
Mr Double says: “Be very careful about having a UK will dealing with foreign assets. Different tax rules apply in different countries. It is therefore best to consult a local foreign lawyer who will advise as to such local rules and regulations, and then you can have a will limited to such foreign assets or take other ‘transfer on death’ steps.
“What is essential is to make sure that each will knows of the other will, as a statement such as ‘I revoke all former wills and testaments’ may revoke the foreign will and cause problems.”
Many people find that the issue of who to appoint as executors is the most difficult part of making a will. David’s son had chosen two executors, but the second one renounced the role because he was in isolation in the US. This was allowed in the UK, but the authorities in Guernsey resisted. They finally agreed to telephone the executor in the US and allowed him to show his passport on a video call, which was enough proof of identity to allow the renouncement to stand.