Making a Will gives you reassurance that your savings and possessions will go to the people and causes you care about and avoids the potential for disputes between those you have left behind.
If you die without a Will, or your will is poorly drafted and out of date, there is no guarantee your possessions will pass those you intended. This can cause a great deal of stress, upset and financial difficulty for loved ones. Despite this, last year a survey of adults in the UK found that 59% had not written a Will.
If you don’t make a Will, the intestacy rules will apply to determine who deals with your estate, who inherits, when they inherit and in what proportions; you will have no control or input over what happens, which may not be what you would have expected. This could have unintended consequences for those you want to benefit and may also have adverse tax implications.
Everyone making a Will faces different issues. If you’re over 55 for example, the process is likely to present very different challenges to those making one in their thirties. Those who have reached the age of 55 may have divorced, re-married, have second families, be thinking about retiring from the family business and be enjoying greater wealth. Therefore, it is vital that as well as considering basic details, that individual lifestyle circumstances are fully recognised too.
Before you go to a solicitor, think carefully about these things:
- Who you want to appoint as your executor? You can have more than one, but no more than four. Upon your death they are legally responsible for distributing your estate in accordance with the terms of your Will. Beneficiaries of your will can also be executors.
- What assets do you have? Be clear about the total value of your estate. Write down the value of all your major assets including: your home (or your share in it), other property or land, cars and other vehicles, items of particular value, such as jewellery or art, savings and shares, life insurance, pensions, property you own with other people and anything you have abroad.
- If you want to gift money or specific items to people, you will need to list the items or amounts and provide the name and addresses of the beneficiaries.
- Who you want to inherit the rest of your estate? You will need to provide your solicitor with the full names and addresses of anyone you wish to benefit from the remainder of your estate - often called the residuary estate - once any liabilities have been paid and after any specific gifts of property or money have been given to the intended beneficiaries. In some circumstances, it may be advisable to set up a trust to help protect the value of assets you own and vulnerable beneficiaries who may be too young or otherwise lack capacity.
- Who should be the guardian(s) of children under the age of 18?
- You may also make clear your preferences about your funeral arrangements.
When making your Will, it is important to consider the implications of inheritance tax. The threshold for paying inheritance tax is currently set at £325,000 but there are exemptions and reliefs available for certain types of gifts and property. Plus, there is no inheritance tax to pay on gifts left to a UK domiciled spouse, civil partner or UK-registered charity.
Subject to certain restrictions - there is a new residence nil-rate band starting at £100,000 per person that will provide an additional relief on top of inheritance tax for deaths on or after 6 April 2017, where your main residence is being left to direct descendants, i.e. children, grandchildren step, adopted or foster children.
After-life planning can be a difficult and emotional process and one that many people put off until it is too late. Making a Will is vital however, and will give you peace of mind by ensuring that your estate will go to the people you choose, that they aren’t paying more tax than necessary and that loved ones will not be left to second guess your intentions and/or fight for what they need to get by.