In the UK, there is full "testamentary freedom" - meaning that there are no set rules about who you have to include as a beneficiary to your estate. That said, there are some people who can make a claim against your estate on the grounds that your will fails to make reasonable financial provision for them. It's important to be aware of this if you are intentionally excluding a partner, child or somebody else who depends on you financially.
People who can reasonably claim against your estate include an ex wife, husband or civil partner who has yet to remarry, somebody who has lived with you as a partner for the two years preceding your death (regardless of if you were legally partnered), or a step-child who has been treated as your own child.
What do most people do?
Most married couples, civil partners and long-term partners choose to leave the bulk of their residuary estate to their partner. Parents without a long-term partner often leave their estate to their children. Many people also choose to include friends, neighbours or other family members.
Approximately 1 in 3 people choose to leave a gift to a charity that they feel strongly about. This has an enormous impact on charities in the UK, accounting for 25% of all voluntary charitable contributions.
Including children as residuary beneficiaries
Residuary gifts to a child under 18 will be held by your executors until they reach adulthood. Your executors can choose to transfer the gift to the child’s parent or guardian for safekeeping at their discretion, or to directly use it for the child’s benefit before they reach 18.
Including a charity in your residuary estate
You can choose to leave a percentage of your residuary estate to one or more charities you feel strongly about. Leaving 10% or more of your taxable estate to charity even reduces your inheritance tax bill.
What happens if my residuary beneficiaries die before me?
For every residuary beneficiary you appoint, we ask who should inherit their share of your estate if they pass before you (these are known as secondary beneficiaries). You can choose to leave their share to their children, other people or charities.
If all of your primary and secondary beneficiaries die before you, your estate will be distributed according to the laws of intestacy.