Misconceptions around estate planning could cost families dearly

Many people in the UK are confused about estate planning, writing a will and the laws of succession, latest research shows.

A survey published last week by financial services giant Canada Life found that almost one in four (38 per cent) of respondents wrongly believed they would avoid probate if if all their assets passed to their spouse when they died.

The data also revealed that one third (33 per cent) incorrectly thought that if someone did not have a will then their estate would be handed automatically to a loved one upon their death.

Meanwhile, 17 per cent believed that if they got married (or re-married), they did not need to update their will, while one in six (16 per cent) thought a cohabiting partner would inherit their partner’s estate, even if the pair were not married.

Commenting on the findings, Liz Hardie, technical specialist, tax, trusts and estate planning at Canada Life, said: “Whilst people generally seem familiar with some estate planning laws, there are still gaps in understanding. The easiest way to avoid potential pitfalls and ensure that your estate is distributed according to your wishes is to write a will and keep it up to date.”

If someone dies intestate (without a valid will in place), their estate will be divided up according to the laws of succession, meaning their assets may not be distributed as they had hoped.

Ms Hardie added: “Making wrongful assumptions about these laws may lead to loved ones facing delays and longer probate, potentially higher inheritance tax bills, in addition to disputes amongst the presumed beneficiaries. As part of the will writing or updating process, it is important to involve your beneficiaries and have an open conversation with them about your wishes.”

Canada Life surveyed 2,000 UK adults by asking them to answer a set of questions designed to find out their misconceptions around estate planning.

Last year research from the firm discovered that more than two fifths (44 per cent) of UK adults had neither written a will nor were in the process of writing one.