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Life insurance and wills

Everyone should have a will. Find out how to make a clear, valid will that offers practical and financial help to those left behind when you're gone.

goco author
Updated 16 September 2021  | 4 min read

Key points

  • Stating how you’d like your money and possessions to be shared out can make things easier for those left behind
  • Wills can also be used to name guardians for your children and explain your wishes for funeral arrangements
  • By not having a will you may unintentionally disinherit some of those closest to you
  • If you have life insurance but don’t have a will it can cause complications

A will is a legal document to help you pass on your money, property and possessions – known as your estate – to your loved ones after you die. It sets out how your finances will be divided.

If you don’t create a will, a set of standard rules and regulations will apply to who gets what. This may mean your estate might not go to the people, or charities and other organisations, you want it to.

What happens if I don't have a will?

Dying without a will is called 'intestacy' or 'dying intestate'. When this happens, your estate will be divided up according to standard intestacy laws. The intestacy laws in Scotland are a little different to those in the rest of the UK.

If you don’t have a will and haven’t got any living relatives, it's likely your estate will go to the Crown or government – this is known as bona vacantia.

If you’ve been part of a couple – but you’re not in a civil partnership or married – and you don’t have a will when you die, your partner won’t be able to inherit your estate.

What does a will normally cover?

When you make a will, you’ll need to decide how you’d like your estate to be shared out and which people or organisations (known as the beneficiaries) you’d like to leave something to. 

To do this you need to list what assets you have and what they’re roughly worth - your assets are the money and possessions you own.

The assets a will usually contains include:

  • Your home and any other property
  • Savings or premium bonds
  • Life insurance or endowment policies
  • Pension funds
  • Your business if you own or part-own one
  • Stocks and shares or investment trusts
  • Cars and motorhomes
  • Jewellery and personal belongings
  • Family heirlooms
  • Any house contents such as furniture
  • Any sentimental items you want particular people to have

You’ll also need to take into account any outstanding debts you have, such as a mortgage, credit card loans, or overdrafts. 

It can be a good idea to get your assets valued when you write or update your will as their value can change over time.

What else can a will help with?

A will isn’t just for explaining how you’d like your assets to be shared out. There are several other roles it can play, including:

  • Naming a guardian who’ll look after your children or step-children under the age of 18
  • Stating what happens if any or all of the people you’ve named to inherit your assets die before you do
  • Naming executors (the people you task with sorting out the estate and administering it) - an executor can be a friend or relative, a bank, a solicitor and/or an accountant. If there isn't an executor, or there's no surviving executor, legal advice should be considered
  • Saying how you’d like other things to happen – for example, your funeral arrangements, or who looks after your surviving pets

Making a valid will

If a will is invalid or unclear, it can create problems. It could mean your estate will be distributed according to intestacy rules or the wishes set out in a previous valid will.

To make a will legally valid it must be:

  • Made by someone of sound mind
  • Made by a person 18 or over
  • Written voluntarily
  • In writing

To be valid in England and Wales, the will must be witnessed and signed by two independent adults. In Scotland, you’ll only need to have one witness.

Witnesses can’t be beneficiaries – and the married partner of a witness cannot benefit from a will in any way – but they can act as executors. 

Your will should name your executors. These people can also be beneficiaries but need to be aged 18 or over. Typically two or more relatives or friends are chosen. 

Your executors have your permission to collect and divide up your assets after you die according to your instructions – this process is known as probate.

Once a will is signed and witnessed, it’s complete.

Can I write my own will?

You don’t have to use a solicitor to make a will. The more straightforward a will, the easier it is to write it yourself. You can take a look at our will writing guide for advice and tips.

Using the wrong wording could mean your will isn’t valid, so start by searching online for will-writing templates. You can also get guidance from Citizens Advice, a will-writing scheme or a charity.

But even with straightforward wills, it’s easy to make mistakes which could cause issues for your beneficiaries. To avoid this, always get a solicitor to check the final document.

Using a solicitor to write a will

It's worth thinking about getting legal advice before writing a will – especially if your arrangements are not straightforward. You should use a solicitor if:

  • You have a business
  • You share a property with someone who isn't your wife, husband or civil partner
  • Your family arrangements mean there could be a claim made on the will (if you have step-children, or have been married more than once)
  • You have a dependant, like a child, who cannot care for themselves
  • Your permanent home is outside the UK and/or you have property outside the UK

Before speaking to a solicitor, make sure you have a plan (or at least an idea) about where you want your money, estate and possessions to go.

And remember to use a solicitor to check a will you've written yourself.

The price, standard of work and quality of service can vary between solicitors. To find the right one, you could use the Law Society's Find a Solicitor service.

Banks and will writing services

Some banks offer a will-writing service and advice about estate planning. You can make an appointment with an advisor at your bank, but check if there’s a charge for this service.

Free professional will writing

If you have legal protection cover on your home insurance and/or car insurance, this could include a free, professional will-writing service. Some trade unions also offer a free will-writing service to their members.

Professional will writers are not solicitors and may not be regulated, so check if they're a member of the Institute of Professional Will writers.

Other free will-writing schemes include:

  • Will Aid
  • Free Wills Month (for over 55s)
  • Will Relief Scotland

If you’re looking for free professional will-writing services, always do your research and read user reviews.

Where to keep a will

It’s important to keep your will safe and where it can be easily found. 

Store it securely at home, with your bank, your solicitor, a dedicated will storage company, or the Probate Service.

It’s also vital you let the relevant people (family, friends, and/or executor) know where to find your will once you’re gone.

Changing a will

Over time, you may want to change your will – if you move house, have children or grandchildren, get divorced, become estranged from/reconciled to people or if your financial situation changes.

It’s a good idea to review your will every now and then to make sure it’s up to date. A good rule of thumb is to do this after any major events or changes in your life.

If you want to make any changes, you have two options:

Using a codicil

If you want to make changes to an existing will you have to use a codicil (an official alteration).

A codicil is generally used for small changes to a will and must be made voluntarily, in writing, by a person of sound mind, and signed by two witnesses.

It’s possible to make more than one codicil, but the more there are, the more complicated a will is to administer. Codicils can also get lost, causing delays and disputes.

Writing a new will

This is usually the best option if you have anything other than small changes to make to your will.

The new will must state clearly that it revokes any previous will or codicil. All previous documents (and copies) should be destroyed to avoid confusion and dispute.

You will need to tell your executor where your new will is, so that they’ll be able to find it when they need to.

If I have life insurance, do I need a will?

Yes, this is because life insurance and wills work in two different ways. 

With life insurance you can either name a beneficiary, or you can choose for the pay out to go to your estate to be distributed as part of probate.

If you write your policy in trust, the pay out should reach your beneficiary faster than it would through a will and probate. It may also mean you stay below the inheritance tax threshold.

But some people choose their estate to be the life insurance beneficiary, so the pay out can be used for things like paying off outstanding debts, clearing a mortgage or covering funeral expenses.

A will can also instruct how the rest of your assets will be distributed, along with other wishes you’d like to be carried out following your death. So it’s always advisable to have one. 

What if my life insurance policy contradicts my will?

A will and a life insurance policy are separate legal documents. It’s possible for someone to be named as a beneficiary on your life insurance policy, but not on your will.

If this happens, the money will be distributed as specified in those two documents. A will cannot override or change a life insurance beneficiary.

This is why it’s best to mention your life insurance in your will. Explaining who the beneficiary is, and even how you’d like the money to be spent, can avoid unnecessary confusion and disputes.

Reviewing these two documents from time to time can also help prevent contradictions.

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