LONDON: The coronavirus has caused an economic and health crisis throughout the world but estimates suggest that ‘will writing’ and trust formations have surged in a post-COVID-19 reality, causing people to feel insecure about their children and therefore are deciding to transfer their properties to their children in case of any fatality.
Tehsin Aslam, who is a well-known expert on Wills and Trusts, spoke exclusively to Geo and discussed how more and more people wanted to sort out their financial affairs now, even if they might have been complacent before.
“I have been working in this industry for 20 years and have never experienced such a panic to write wills and do estate planning as soon as possible. Because of COVID-19, we are all at a stage where we know someone who has died and did not have a will.”
Tehsin explained that without proper estate planning, up to 40% of the estate could be deducted in inheritance taxes while it could take years before the descendants receive their share of the estate.
“Just writing a basic will is not enough to protect the estate from inheritance tax, a future divorce, care home fees, or from bankruptcy. The only way to make sure your hard-earned money goes to your loved ones is by setting up relevant trust structures.”
The number of people without a will in the UK is at an all-time high and it means that over 31 million now run the risk of dying intestate and having their estate distributed solely according to intestacy law which may not reflect their wishes, she said.
She said that in normal times people have not been taking will writing seriously. On average, 70% of the UK population does not even have a basic will in place, therefore they will not have sorted out their financial affairs either. “This results in firstly, the estate having to go through probate, which means the loved ones cannot have access to the assets, therefore in most cases they suffer financial hardship for 6 months to a few years.”
Tehsin said that without a proper will, probate, which is the legal administration of the state, has to be done when someone dies. This means that loved ones cannot have access to the money until any inheritance tax due is paid. Only then the probate process is complete and assets are released to the beneficiaries.
Tehsin Aslam said that over the past 20 years, since she has been in the will writing and estate planning industry, she has been trying her best to raise awareness amongst the South Asian communities about the importance of putting their financial affairs in order and the consequences of not doing so. “But still there are many wealthy families who don’t even have a basic will in place. They are simply in denial that they are ever going to die. At Abacus Wills and Trusts we have many solutions to help our clients to save all of their inheritance tax liability. It is true that due to the coronavirus, the internet search for will writing went up by 76%. More and more people want to sort out their financial affairs now, whereas they were complacent before, thinking they have the rest of their lives to sort it out. I hope that this will encourage our communities to sort out their affairs as soon as possible.”
She said that those who have not written a will are worried that if they die due to the coronavirus, their loved ones will suffer as they have not sorted out their financial affairs. “The main worry is that if they die without a will, their assets may not go to who they want it to go. Also, the government can take 40% inheritance tax from their estate, if the correct planning had not been done before death.”
Throughout the world, the coronavirus has deeply impacted the behaviours of populations with states enforcing lockdowns to combat the spread of the infection. With global deaths crossing 200,000, many people are considering writing their wills after experiencing the deaths of their loved ones.
The UK also has a greater death rate from the coronavirus of approximately 7.3% as compared to 3% of Germany. This might be because of different testing strategies or a different impact on the virus. Regardless of the cause, people in the UK are rushing to get their wills written in the wake of this global pandemic.