Wills and inheritance tax
Why make a will? 52% of the population haven’t done it!
Making a Will is one of the most fundamental aspects of estate planning, yet many people do not appreciate its importance. According to a study, more than half (52%) of the population have not considered making a Will and are unsure whether other family members have one. Of the 3,000 people surveyed, 33% claimed they do not have any assets to pass on, while 32% said they would not consider getting a Will until they had children. However, it is never too early to draft a Will; but unfortunately, it is often left too late.
Why make a Will?
No one likes to think about their own death, yet few of us would want to see loved ones struggling in our absence. Drafting a Will, however, can help alleviate such concerns. This painless process will ensure that your assets are distributed in accordance with your wishes, leaving you assured that proper provision has been made for those you feel should benefit.
Whilst it is not obligatory by law to prepare a Will there are numerous advantages in doing so, as outlined below.
The legal process will be much simpler
If you do make a Will then the legal process in dealing with your affairs will be easier and much less painful during what is an already difficult time for your loved ones. Where a Will has not been made, the individual will have died intestate. This can often create unnecessary distress and financial difficulties for family members whilst your affairs are dealt with.
You can name your beneficiaries
By making a Will you can retain control over who will receive your assets upon your death. In the absence of a Will, your estate will be distributed in accordance with the laws on intestacy, which could result in family, friends and charities missing out altogether or not receiving what you would like them to.
This is particularly pertinent to unmarried couples, or same sex couples who have not entered into a civil partnership. Under current law, on intestacy unmarried couples do not inherit from their partner. Drafting a Will is the only way to ensure that the people you choose will be provided for in the event of your death.
You may appoint guardians of your choice
If you are the parent of young children, you will want to protect their future should anything happen to you. Making a Will enables you to appoint a legal guardian of your choice to look after your children until they reach the age of eighteen. Of course, permission will need to be obtained from your chosen guardian before the Will is drawn up. Where a Will has not been drawn, the courts will appoint someone on the deceased's behalf - someone they may not have chosen.
Minimise the inheritance tax bill
Drafting a Will may also allow your assets to be distributed in a way that reduces your inheritance tax liability and thus maximises the amount that will be passed to your beneficiaries. However, early planning is recommended if you wish to take full advantage of the tax opportunities that may be available to you.
Nominate executors of your choice
When making a Will you will be required to nominate one or two individuals, often family members, to deal with your affairs upon your death. Doing so will leave you confident in the knowledge that your affairs will be handled in accordance with your wishes by someone you trust and your family will be left with clear directions on how to deal with your estate.
Preparing your Will
Whilst it is possible to write a Will yourself, it is advisable to seek assistance as the legal requirements can prove somewhat perplexing. This is where we can help. Our trained team of solicitors and legal experts can advise you on all matters in this process, including possible inheritance tax liabilities. Please contact us for more information.
Before consulting a solicitor, however, you should give some thought to the contents of your Will. Compile a list of your possessions including property, cars, jewellery, home contents, bank or building society accounts, shares and life insurance. You should also name your beneficiaries and choose a legal guardian for any children under 18 years of age.
A key element in making a Will is the naming of executors. An executor is the person responsible for passing on your estate. These are often unpaid friends or family members, typically a spouse or partner, but can be paid professionals such as solicitors or a bank or building society. Before nominating your executors you should obtain their permission.
For a Will to be valid, the document must be signed by the person making the Will (the testator), or signed on the testator's behalf in his or her presence and by his or her direction. This must be done in the presence of two witnesses who then sign the Will in the presence of the testator.
Anyone who is capable of understanding the nature and effect of what they are doing and is not blind, may act as a witness. However, the individual should not be a beneficiary of the Will or married to, or be the civil partner of, a beneficiary. In these circumstances the Will remains a valid and legal document, but the gift to the beneficiary cannot be paid.
Keeping your Will up-to-date
Once your Will has been drafted, it is imperative that you keep it up-to-date. A Will should ideally be reviewed every five years and after any significant life event, such as marriage, divorce or a birth or death in the immediate family. Moving house would also prompt a revision. Any change may be made by 'codicil' (an addition, amendment or supplement to a Will) or by making a new Will.
And finally, ensure your Will is stored in a secure environment. The document may be held with a solicitor or deposited with a probate registry for a small fee.
How Can We Help?
Our experienced team can help you with all aspects of preparing and drafting a Will including structuring your affairs to minimise your tax liabilities.. Please contact us for further advice and assistance.
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.