Why you need a will and how to start one

What are the benefits of having a will?

A will settles future arguments

Bereavement is a stressful time for people and when it comes to what to do with your effects, you will want to reduce the number of decisions that your beneficiaries would need to make. If you know that certain items, such as your home or any antiques, are likely to cause an argument over what should happen to them on your death, consider making a clear path for them in your will to avoid this. Other arguments settled can be on the subject of your end of life care (through a living will) and burial arrangements.

 

Makes the process simpler

If you have a will, there will be less work involved for your executor(s), which means that it will all be settled a lot sooner and will cause less stress for your loved ones, while they are dealing with bereavement.

 

Provides care for your dependants

If you have dependants, such as children (or even pets), you will be able to appoint legal guardians for them through your will. This way, you can make sure that the people or person you trust the most to take care of them will be the one or ones with whom your dependants will be living. Without a will, they may go to someone who may not be who you intended or spend time in foster care while it is all sorted out.

 

Protects vulnerable beneficiaries

If one of your beneficiaries is vulnerable, either through their age or health, you will be able to state what would happen to their portion of the estate and set up the care required for them to have a stable life.

 

Can help reduce inheritance tax

Proper planning, such as giving money to charity in your will as mentioned later in this article, can reduce the amount of inheritance tax you will need to pay. You can leave the first £325,000 of your estate to someone tax free but if your estate includes a property, there is an extra allowance for this when it is passed onto a direct descendant. Married couples are also allowed to pass on the unused proportion of the allowance onto their spouse when they pass on and their estate is inherited by someone else, to reduce the amount of tax paid. This means that if they only used the first 50% of the allowance (known as the nil-rate band), an extra 50% would be available to use for the surviving spouse’s estate when they pass.

You will also be able to leave a large amount of your estate, such as property or assets, to your spouse or civil partner tax-free so you should consider doing this as well.

A life insurance policy that goes into trust could also be used to help pay for fees, such as bills or the mortgage on the family home, but will not be included for the purposes of calculating inheritance tax. The process for this is complicated and so it is always best to seek legal and financial advice before finalising any plans, as if it is not done correctly, it will be subject to tax.

 

Protects unmarried couples who may not inherit through intestacy rules

If you have a partner but you are not married nor in a civil partnership, your partner may not automatically inherit your estate the way that married couples would. Having a will would give them that layer of protection and would enable them to inherit a portion or all of your estate, without having to go through court proceedings.

If you are not married, but own a property with someone as ‘tenants in common’, your co-owner would not automatically inherit your portion of the property without a will. Your portion of the property would go to your relatives and could potentially result in the house being sold in order for them to gain the monetary value of their inheritance, leaving your partner looking for a new place to live or trying to find the money to buy the relatives out.

 

Enables you to support causes that matter to you

If you want to give back at the end of your life, leaving a gift in your will for a charity can be a great way to do this. You can choose to leave a specified amount (pecuniary), a particular item such as property or shares (specific), or the whole or part of what remains of the estate, after other parts of the inheritance and costs have been paid (residuary).

Another benefit of leaving money to charity is that it can reduce the amount of Inheritance Tax you will need to pay, as the money left to the charity will not be included in the amount that is taxed. If you leave 10% or more of the money remaining after the nil-rate band amount, you will see a reduction in Inheritance Tax from 40% to 36%.

 

States clearly how your remains will be settled

If you have a particular preference for how your remains should be dealt with upon your demise, you can state this in your will and it shall be followed as closely as humanly possible. Depending on your budget, there are plenty of options available, from an eco-friendly cardboard box burial, to cremation with a tasteful urn or plaque, to being turned into a diamond that can be worn by a person of your choice as jewellery.

 

Helps you to leave an inheritance to those outside the family

Without a will, your estate would normally go to your spouse or closest living relative, which means that any friends to whom you would want to leave a gift would not be able to inherit. Having a will would enable you to leave them a gift or your entire estate should you wish to do so.

 

Things to remember

You must provide reasonable care

If there is someone living with you or who is directly benefitting from you financially while you are alive and you do not provide for them in your will, they may be able to challenge your will. Making sure you know what level of care you will be obligated to provide and setting aside a provision for this in your will should make this easier when the time comes.

 

Who you will make your executor

Being an executor is an important job and can be complicated, depending on that person’s knowledge of the law and your current state of affairs. Professional executors can be used and this is sometimes simpler but if you are going to appoint someone you know, perhaps a loved one or a trusted friend, make sure that they can handle this responsibility and consider having joint executors – a friend or loved one and a professional executor.

If you are going to use a friend or loved one, discuss this with them first, as they may not feel that they are up to handling the responsibility that you would be giving them.

 

Witnesses cannot be beneficiaries

You will need witnesses for signing your will to make it a binding document but you cannot have someone who will benefit from the will as a witness, as they would lose their gift in the will. This also applies if the witness is married to a beneficiary – they will lose their gift.

 

Keep your will somewhere safe

Your will can be kept in a variety of locations, such as your solicitor’s office, a safety deposit box or anywhere you deem to be safe. Just be aware that it will need to be somewhere that your executor will be able to get hold of it easily, so if it is hidden away, make sure that they know where it is or the process will be delayed.

 

Wills can be changed at any time

Should your circumstances change, through marriage, divorce, births, deaths or ties being cut for example, you may wish to change your will. This can be done as many times as you like, so long as it is completed officially and you are of sound mind.

 

Old wills must be destroyed to avoid confusion

If you decide to change your will, you will need to destroy your old one(s), as having them around can delay the process while your executor(s) try to work out which of the wills is the most recent. If there is only one will in existence at a time, this will also mean that there is no chance of the wrong will being used, if it was the first one found.

 

Costs can vary

Costs can vary based on the level or service you require. A simpler estate may gain a lower fee than a more complex one, and there will also be different costs involved for whether you include executor fees in your purchase.

 

Include a chain of inheritance, should your beneficiaries predecease you

It is nearly impossible to know how or when exactly we will die so you can’t always be sure that someone you are leaving a gift to in your will is going to survive you. Just in case one or more of your beneficiaries predecease you, you can choose who to leave that portion of the estate to instead. You may decide to leave it to their descendants, to be redistributed between the remaining beneficiaries or you can state that you would like it to go to someone entirely different.

You should also consider who will inherit their estate when they die, as you may not want that person or people to inherit the remains of your estate when your beneficiary eventually dies.

 

Everything will be valued

All of your possessions, including property down to the smallest items in your cupboard, may need to be valued to ensure that your estate will be taxed appropriately. The more organised your belongings are prior to this process, the simpler it will be.

 

How to start a will

Based on the points above, start thinking about where you would like your assets to go. Consider who you will need to support and how you would like your remains to be dealt with after your passing. There are various starter packs available online and through different charities (usually if you are planning to leave them a gift in your will) but it is always a good idea to get legal advice before finalising any documents.

At CP Law, we will be happy to speak with you to go through your requirements and our services to make the process as simple for you and your beneficiaries as possible.