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Study reveals £15 billion lies in unclaimed financial assets

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There are literally billions of pounds that remain unclaimed by their rightful beneficiaries, because of a failure to make adequate and express provision for the distribution of assets from the estate of people who have died, according to research by a leading will writing company.

How has that happened – and how might the losses be avoided?

Talking about your wealth

You’ve worked hard all your life, made savings and investments. There’s always that thought in the back of your mind that all you’ve accumulated will, of course, be passed on and enjoyed by your children and loved ones.

Sadly, in many cases, that thought remains very much at the back of the mind, without sufficient care taken to ensure that the wealth is actually passed on in the way you had always intended.

The reasons might not be so difficult to understand. Talking about your wealth is likely to be difficult at the best of times – even with family members. If the conversation is about what happens to that wealth on your death, the conversation is likely to be more difficult still.

Unfortunately, that reluctance to discuss the inevitability of your death and what happens to your wealth when you die even extends to a failure to do the one thing that makes everything clear and certain – writing a will.

Making a will

The charity Age UK is unequivocal – making a will is vital if you want to make sure that your children and loved ones inherit the wealth you leave behind when you die.

Yet there is ample research to show that an alarming number of people fail to do so. In January 2018, for example, the Independent newspaper cited studies conducted by Macmillan Cancer Research suggesting that 42% of the over-55s have no will at all and that 1.5 million people may have remarried, making any previous will invalid.

Just one year on, in December 2018, the situation appears to have become still worse, with the Consumers’ Association’s Which? magazine finding that 54% of the population, and 60% of all parents, had made no will. An estimated 5.4 million people did not know how to make one.

Why it is so important

If you do not make a will, Citizens Advice lists some of the consequences:

  • in the absence of a will – the deceased dies intestate – legal rules come into play about how the assets of the estate must be distributed, and these may be quite contrary to the manner in which you had intended;
  • if you are not married or have not registered your civil partnership, your surviving partner is unable to inherit your estate – and you are likely to leave them with potentially serious financial difficulties;
  • where there are children of any union, a will is needed to determine what happens to your estate if you or their other parent dies;
  • any changes in your circumstances, such as remarriage or registering a new civil partnership makes any previous will invalid and you need to make a new one;
  • if you separate or divorce, you might want to amend any previous will or make a new one; and
  • making a will may enable you to put your financial affairs in sufficient order to reduce the amount of Inheritance Tax your estate is obliged to pay.

In some instances, your financial circumstances may be sufficiently straight forward to write a will yourself, but in many instances – especially if a large or complicated estate is going to be involved, you might want to consult specialist advice.

The consequences

With an estimated 30 million individuals failing to make a will, the startling upshot is that some experts estimate that financial legacies worth an estimated £15 billion have still not been claimed by the rightful beneficiaries and, in accordance with intestacy rules, a further £40 million has passed into public coffers since 2015 alone.

Surveys have shown that 31% of children want to have that conversation with their parents about the management of their estate when they die and 29% of parents also want that same conversation – yet both sides studiously avoid the subject for fear of upsetting one another or finding it altogether too awkward or depressing. But all the while, 38% of children surveyed considered the management of their deceased parents’ estate to be one of their greatest responsibilities in life.

For any chance of that happening – and to reduce the huge volume of financial legacies that go unclaimed – parents, therefore, need to talk to their children about what happens to their estate when they die; children, for their part, also need to discuss financial matters with their parents so that residential care and other expenses are covered and the whereabouts of assets and investments are known.

The outcome of any such conversations, therefore, also need to be faithfully recorded in your written will.

This data is correct as at the time of writing. 

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