Leaving your buy-to-let property in your will is not just a legal formality; it’s a powerful way to provide for those you care about.
Whether you’re a landlord or a homeowner, it is important to have a will written up so that your assets are passed onto your loved ones.
Should new landlords have wills written?
According to a survey based on 2,000 UK adults, one in three (33%) adults who are aged 55 and over do not have a will in place.
The research by Canada Life also found that the belief that they do not have enough assets or wealth to warrant making a will (24%) and the belief that loved ones will automatically inherit their wealth regardless (17%) were the top two reasons cited.
Despite these misconceptions being common, making a will is a simple process which can save your loved ones a substantial amount of stress and burden during a difficult time.
Even if you are young or new to investing, getting a will arranged should be a priority, especially if you have a property to pass down.
What would happen to my property and assets if I don’t leave a will?
- Any inheritance tax that your estate/beneficiaries pay might be higher.
- The law will decide who inherits the estate according to certain criteria called ‘intestacy rules’.
- If you are not married or in a civil partnership, your partner will have no legal entitlements to your assets.
- If you have children or grandchildren, the amount that they are legally entitled to will depend on where you live in the UK. As opposed to making a will and being able to decide how much each individual receives.
What happens if I still have a mortgage on my buy-to-let?
When a homeowner or landlord passes away without a will, the mortgage on the property doesn’t automatically disappear.
In most cases, the responsibility for paying off the mortgage would pass to the new owners of the property, usually the beneficiaries under the rules of intestacy. They would have the option to either continue making mortgage payments or explore other options, such as selling the property to pay off the mortgage.
As well as writing a will, many investors choose to set up life insurance, as this can be used to clear any outstanding mortgages.
To discuss your mortgage, get in touch with our expert broker partners.
Should I transfer ownership of my buy-to-let instead?
Some homeowners decide to transfer some or all of the ownership of their property to other people – often their children.
When deciding whether to transfer ownership of your buy-to-let property during your lifetime or include it in your will, you should consider various factors including legal, financial, and tax implications.
It’s highly recommended to consult with a professional advisor who specialises in estate planning and tax law to get personalised advice based on your specific situation.
Why it’s important for all landlords to get a will written
If you own an investment property, it’s imperative to make a will to ensure that your chosen beneficiaries inherit your assets, rather than the law choosing for you.
Your buy-to-let property can serve as an invaluable asset for future generations. By leaving a property in your will, you’re not only passing down financial security but also imparting valuable lessons about investment and responsible financial management.
To ensure that your wishes are executed precisely as intended, seeking professional legal advice is paramount. A qualified solicitor can guide you through the intricacies of estate planning, helping you draft a will that safeguards your buy-to-let property in a manner aligned with your aspirations.
For more advice and guidance on property management, contact Martin & Co’s expert letting team today
