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Should I Make a Will – probably: here are some things to consider…
If you are over 18 (or over 16 and on “active service”) making a Will is prudent, but in all honesty making Lasting Powers of Attorney is FAR more important at that age UNLESS you have significant assets, a permanent partner or parental responsibilities (even if they are months away!) But it is certainly a good habit to get into as early as you can, and you should pick up a few more free tips as you go through this article.
Will making is not that much fun, but it is a really important part of your Legal Planning. Probably 9 in 10 people are negligent when it comes to it.
Those who do get around to it usually think “job done” and get on with life. In the meanwhile, taxation changes, the Law evolves, and Judges make sometimes surprising decisions which amend or extend the law. And last but not least your family situation will change, usually radically. Those totally dependent kids may become far better off than you, or they may suffer a serious illness and remain totally dependent on you.
Every such situation that comes up means that your Legal Planning (and not just your Will) needs review. Not necessarily change – I try to make my clients’ Wills as flexible as possible rather than needing to be changed every time a new child is born – just Review to ensure they are still doing the job.
But this Article is really about:
What you need to consider when making your Will
So, let’s get into it:
What do you own or benefit from?
Not just what you physically own, but what other benefits there may be – for example, pensions, death in service, and life insurance.
Many of those will have an impact when you die, and failing to pay attention now will have a knock-on effect when you die: extra taxation, benefits going to the wrong people, and misunderstandings about what there is. Prepaid funeral plans are a good example of benefits often missed, and Over-50s Plans are (in my opinion awful) often cancelled without thought by well-meaning Attorneys trying to cut needless costs.
Of course, there are the obvious things you may own:
- Property: your home and maybe other properties – possibly even abroad.
How are they owned? In shares (Tenants in Common) or as Joint Tenants where you each own all of the property so it passes semi-automatically to the survivor. That is an advantage in speed and initial cost, but can lead to total loss to creditors, or the disinheritance of the children of the current relationship. Predatory marriage is not that common, but second or third marriages are, and maybe the wealth passed on should be fairly distributed – without disadvantaging the survivor.
- Bank accounts, Premium Bonds, shares, and ISAs
This includes jointly owned accounts, many of which are (often innocently) passed fraudulently to a mere co-signatory on death.
- Assets held in Trusts – for example, life insurance policies or a pension – they need attention.
- Personal belongings – this includes cars, jewellery, family heirlooms, and other valuables
- Debts and liabilities – as these will affect the final value of your estate, it’s important to include them. Of course, there may ultimately be debts to care homes.
- Business Assets – this is an area where a spot of sensible planning ahead can make a big difference. Too many businesses die needlessly with their owners.
- Overseas Assets – firstly, you need to be aware of what ARE overseas assets – it is not always obvious!
Clearly, a bank account or property overseas is obvious. But some “British” companies are now listed in the US or Canada including some privatisation shares. If these are owned at the time of death, then (at least) Medallion Guarantees will be required by the North American authorities before any share sale or transfer can take place. This adds to delays and costs. In general terms, an English/ Welsh Will can cover most countries but issues with translation mean it is often worth writing a local Will too. But be careful when making BOTH Wills cover specific countries and do not cancel each other – which may happen automatically if you do not instruct the drafter fully.
How to Write Your Will
When you have no responsibilities, a Will Kit or online Will may well do. But it is far better to deal with a professional with an ongoing service (hint!) so you get into the habit of reviewing your Will on a regular basis, and can talk to your professional adviser from time to time – my Peace of Mind Service allows you to do that for a modest annual subscription and give you a discount on future work we do together as a team.
Choosing your Executors
When making a Will, you decide who the Executors will be. After you have died, it will be their job to deal with your estate, get all the details of the assets and liabilities, complete the legal paperwork (if needed) to obtain the Grant of Probate, then gather in the assets, pay the bills and FINALLY pay out the beneficiaries. Up to four people can be named; but you should have a minimum of two if possible.
You should consider choosing people who are capable, willing, not bullies or bulliable and totally trustworthy to be your Executors. Many people choose their spouse,childrenr, or other close friends (who may say yes – but do they really want the hassle?) Your Executors can also be beneficiaries of your Will. Lost of executors are NOT scrupulously honest, so think long and hard about the choice: will they act with total honesty, and do what your Will says? If you have any doubts, don’t use them. If you are not confident your family are up to it, then by all means talk to me about economical professional executors.
Are your executors likely to be young enough to when you die? If you die at 90, how old will your executors be? Will they still be close to you? The choice of executors is one of the many things I like to review on a regular basis. It is unlikely to be appropriate to continue with a poorly 75-year-old friend if you have children who are more than capable. Making a Will is really not a one-off job, it is an evolving process through your whole life.
If you don’t appoint Executors, you run the risk of ending up with the wrong person doing the job and either tipping your family off or worrying themselves to death over the responsibility. Additionally, by not leaving a Will at all, you leave your estate to be distributed by the rules of intestacy. This could cause complications for your family and friends after your death.
You can name a professional as Executor. This ensures that your estate is in safe hands and is useful for those struggling to choose their Executor. A professional Executor can be named solely or alongside a friend, family member, or other individual, though that is actually likely to increase the cost as the professional has to work with and coach the layperson.
4. Naming your beneficiaries
Clarity is the order of the day here, it needs to be absolutely clear who each individual is, and if you are deliberately leaving someone out, it can be prudent to leave them a small gift and a letter of explanation so they can’t go to Court and claim you have merely forgotten them. Use full names, and make sure they are correct as many people don’t use their legal names, and the legacy might go to someone who actually has the correct name, but is not your intended recipient.
I like to use class gifts to cover say “my children” or “my partners children living at the time of my death” which means that new children are added automatically – no need to pay extra for a rewrite. Another example might be “I leave £x to each of my grandchildren.” Things can get more complex, but this isn’t a Will Writing course! For example, should the inheritance go to the children of a beneficiary who has died before you?
5. Trusts, Children and financial dependents
Firstly, it is difficult to leave out people who are financially dependent on you – they may have rights, and if you leave them inadequately provided for, the lawyers may have a field day plundering your estate in an attempt to right this potential “wrong” – so have a care.
Children who are unable to manage their own affairs through age or infirmity may best be provided for by way of a Trust in the Will, with suitable Trustees to look after it.
Trusts can protect against creditors, they can protect against your assets ending up going to the children of your spouses’ new partner after you die.
There are all sorts of uses for trusts.
6. Funeral Wishes
If you have any specific requests for your funeral service, you should detail them in your Will but also make sure they are known, as funerals are often arranged quickly, and the Will may not have been looked at yet, so a paper version of your funeral wishes at home would be belt and braces. The number of families who fall out REALLY badly over funeral arrangements is horrifying. Even if you don’t care, make something up and avoid fighting over your wishes!
7. Will Inheritance Tax be payable?
If Inheritance Tax (IHT) needs to be paid, it is largely due before you can even apply for probate, and no later than the end of the month 6 months after the month you die in, or there will be significant interest and possibly penalties. The Executors of the Will are responsible for ensuring IHT is paid.
Usually, there’s no IHT to pay if the estate is below £325,000 or if everything above this amount is left to a spouse/civil partner, a charity, or a community amateur sports club. However, there are exceptions. Property owners have an additional allowance of up to £175,000 each – I won’t go into that too much here, but most couples need not pay Inheritance tax on estates below £1M provided any lifetime gifts don’t drag it over than limit. Again, too much detail for here.
8. Who will witness and sign your Will?
A Will is WASTE PAPER until it is correctly signed and witnessed in the presence of two sober and sighted people. They must witness you signing your Will and also sign it in your presence. The witnesses must see the will signed at the same time rather than at different times.
The witnesses cannot benefit from the Will neither can their spouse/civil partner.
9. Storing your Will
If you’re writing your Will with a professional provider, they will likely have access to a secure storage option. This is often free of charge – our is not free, but we don’t just throw Will in a vault and forget them – there is an ongoing servicer).
Alternatively, you can keep it yourself, but it’s important to put it somewhere safe. You shouldn’t staple or clip anything to your Will, rest on it when writing something as a damaged Will can be deemed invalid. You should inform one of your Executors of your Will’s location to make the process easier after your death. Home stored Wills are often “lost” when a disappointed beneficiaries spouse finds and destroys them.
10. Making a Will and Updating Your Will
If you are going to do the job, you might as well do it properly. Your life WILL change, Tax WILL change, beneficiaries will CHANGE, the Law WILL change, and everyone’s circumstances WILL change.
We recommend, as a minimum, a brief review every 3 years, and our Peace of Mind Service members will be reminded every year to consider that year’s changes to see if they need a FREE chat.
