The American writer, humourist and contrarian Mark Twain’s advice to “Never put off till tomorrow what you can do the day after tomorrow” has apparently been adopted by too many of us when it comes to the crucial but frequently neglected area of succession and estate management.

A couple of years ago it was estimated that just over a third of Scots had got so far as making a will – even though failing to do affects everyone with assets such as life insurance, pensions, property or a car.

Plus, the debts many of us will almost inevitably have, including mortgages, credit cards or loans.

“There is a common misconception that wills are either for the wealthy or for making complex inheritance arrangements,” says Alexis Graham, Partner in Shepherd and Wedderburn’s private wealth and tax team, which was recently named Out-of-London Practice of the Year at the Chambers High Net Worth Awards.

“Whether you're young or old, or wealthy or not, if you have assets in your name and even if you don’t, there are certain basic building blocks you should put in place and making a will is the first.”


No more excuses

There is of course a multiplicity of excuses to justify inaction. Some simply don’t want to confront the inconvenient inevitability of their own demise; others think they have nothing of value to leave (though their family members might disagree, even for sentimental reasons).

And assuming that if you are married everything will automatically go to your spouse is, to say the least, optimistic. Scotland’s rules of intestacy (when someone dies without making a will) are complicated and can result in different shares of the deceased’s estate being awarded to different people – risking those who would have otherwise benefited from the estate being left out.

The law of intestacy, Graham points out, is not exactly Generation X, Y or Z friendly. It was instituted almost six decades ago and while it has been updated several times since the values on which it was based, she says, do not necessarily represent those of contemporary society.

Cohabiting couples, for example, now constitute the fastest-growing family type in the UK while divorce rates rise. More of us will have multiple spouses over the course of our lives as a result, while living alone is increasingly popular. In essence, Graham says, as the non-traditional, nuclear family model is being rejected by a younger demographic, it’s particularly important that those not within this kind of arrangement should make a will.

“If you are not married and have children, for example, you should appoint guardians for these children. It’s very important that if something happens to you that your family members can still be involved in that child’s life.”


Rights and wrongs

For those who are not married, she adds, it’s also essential to be aware that cohabitants also have rights – as some who are not in a marriage or permanent relationship assume that they don’t have to worry about other possible claims. “It’s very important that your will factors in your particular family dynamic,” she says.

A well drafted will also include inheritance tax planning, though that’s not necessarily the sole motivation, while Graham also stresses the value of putting in place a power of attorney, where another person (known as the attorney and usually a relative) is given the authority to deal with aspects of your affairs, which could include financial matters and personal welfare, if you later lack capacity to do so yourself.

“It’s another of these basic building blocks that we strongly recommend you put in place,” says Graham, who highlights another misconception that this is only necessary for older people. “Fundamentally the power of attorney protects you in the event of a loss of capacity, which can happen at any time in various scenarios.”

The Covid-19 pandemic, of course, is one of those “what if” scenarios that were almost unthinkable until relatively recently. That and other recent events, such as the war in Ukraine, have seen many people reassess their lives and their personal prospects. A power of attorney, Graham says, is a cost efficient, relatively easy document to put in place and if you don’t have one, you must go through a lengthy court process to obtain it at a later stage.


A changing environment

Covid-19, the climate emergency and personal lifestyle reassessment plus the advance in ESG (Environmental, Social, and Governance) values in the business space have also changed people’s imperatives as to how they invest their money and how they would like to bequeath it.

“Increasingly, we aren’t primarily motivated by achieving the highest returns and income from our investments; we also want to make a positive social impact on the world and that is particularly reflected in the charity sector.

“Charities, though, are run by trustees who have a duty to maximise the assets and investments under their control, which they must balance with maintaining an ethical stance. But what has become clear from the Charity Commission and the Scottish Charity Regulator is that they are taking a more positive stance on the ethical aspect.”

Anything you leave to charity is exempt from inheritance tax and if you leave more than 10 per cent of your net estate to charity you are subject to a reduced rate of inheritance tax overall, and she says there has been an uptick in these arrangements.

These are among many developments in a dynamically changing area of the legal world. “Given the seismic changes we are all experiencing in our lives, everyone’s needs and aspirations are different as they experience these changes to a greater or lesser degree. Much of the satisfaction I get is through advising people on their own unique circumstances and helping them achieve what is best for them,” says Graham.


The reason that we should address these issues now rather than later is, says Alexis Graham, that estate planning simply takes time. “If you want to reduce your estate for estate planning purposes it has to be done carefully and it’s not something that can be left until the last minute.

“Understandably it’s something most of us focus on later in life but it’s much better for everyone involved to progress in small steps over a longer period – it’s important that people think things through and don’t attempt to decrease their estate so much that it has a negative impact on their life now.”