10 Things to Consider When Writing Your Will
If there’s one thing that’s guaranteed never to come up in conversation on a night out with friends, it’s what you’ve put in your Will. Not only is death a subject we’re not too keen on discussing as a culture, but another big taboo is also wealth. And they aren’t always easy. With families increasingly changing shape through separations and new partners, it can be difficult to consider what you want to happen with your wealth after death. With that in mind, it’s hardly a surprise that more than two-thirds of UK adults don’t have a Will at all. As we age, we start to take more action, but still, a third of over 55’s are yet to organise a will.
We’ve pulled together a list of the top 10 things to consider when making a Will:
1. Do you have any business interests?
If you own a business or you have shares in a company, this will be included in the value of your estate. It is vital you state in your Will exactly what you would like to happen to any business interests after you pass away. Do you really want your shares to pass to your children, or would you like them to be bought by your co-owners for a fair price? If that’s the case, do you have a shareholders agreement in place, and will they have the funds outright to buy your stake, or will they need life insurance in place? Our financial planners can help discuss this further with you.
2. Decide on your Executor and Trustees
An Executor is the person responsible for dealing with your affairs and arranging how your Will is carried out after you die. Usually, they will be appointed as a trustee of your assets. It is important to ask your chosen person whether they are happy to be your Executor – and make sure they are up to the job. To prevent any family disputes, you could instruct a solicitor to become your Executor. We provide that service too.
3. If you already have a Will, when did you last review it?
Life changes, relationships change, and your estate may have grown bigger since you first wrote your Will. It’s important to review your Will after any major lifestyle changes, and on an annual basis in case the value of your estate has increased, due to your wealth or rising property prices.
4. Have you checked any Inheritance Tax (IHT) liabilities?
If your estate is worth more than £325,000, Inheritance Tax will be owed at 40%. From April 2017, a ‘main residence’ allowance of £100,000 was added to the inheritance tax ‘nil-rate’ band, where the family home passes to a direct descendant – see our blog for more details on this: Property – Top Tips for Effective Estate Planning.
5. Do you have any children?
This is one of the most important points of having a Will – especially if you have children from a previous marriage. Don’t assume each child will naturally inherit your wealth. There have been cases where children from previous marriages have not inherited from a parent due to the absence of a Will where funds simply go to the new spouse. Furthermore, make sure you state who will look after your children as guardian if you pass away.
6. Who will inherit your property, possessions, or any gifts of money?
If you’re not married to your partner and you die without a Will, your partner may find themselves without a right to stay in your shared home or any money. If you have recently divorced, make sure your Will has been updated accordingly. If you have a joint mortgage, check the terms – are you ‘joint tenants’ or ‘tenants-in-common’? ‘Joint tenant’ mortgages will pass to the other owner of the property. ‘Tenants-in-common’ mortgages are more complex – you will need to state what happens to your share of the property. What’s more, if you share property overseas, you may need to check the inheritance law in that country. See our Inheritance guide.
7. Do you want to give money to any charities?
Did you know that if you leave 10% of your wealth to charity, your estate will only be taxed at 36%? There was a recent case in the news where a mother left her entire estate to an animal charity, and this was challenged by her daughter. If you do decide to leave money to charity, then you must state this in your Will.
8. Have you written a Letter of Wishes?
This gives your executor guidance on how your Will is to be carried out. It is not legally binding but is a very useful document because it can be kept confidential (if you have a sensitive family situation) and it can be easily updated, as and when required.
9. Having a Will prevents costly probate fees in the future
Without a Will in place, did you know that it could cost up to £20,000 to sort out a person’s money, property and possessions after they die? Parliament has recently been debating probate fees, which were set to rise – however, this has been blocked (for now). The probate process can take months, even years – don’t let this happen to your nearest and dearest, especially when they will be grieving for your loss.
10. Have you thought about where you will store your Will?
Your Executor must know where your Will is stored, as well as any friends or family members in case anything happens to the Executor. Many companies provide storage (sometimes free) as part of their services. You could keep a copy of your Will with your solicitor. If you are currently storing your Will at home, make sure it is safe and well-protected.
Having a sound Will in place gives you peace of mind that your estate will go to the right people when you die. It will also ensure that your wealth isn’t drained by needless probate, court and solicitor fees. A Will is one of the keystones for successful wealth management, so that your legacy can be enjoyed by future generations to come.