Why Should I Make A Will?
If you die without making a Will, the law imposes its own rules (Intestacy) which could mean that relatives or others inherit in an unintended way. A Will enables you to put the person (or persons) of your choice in control of your affairs after your death. If you do not make a Will the person who ends up dealing with your estate could be unsuitable.
No matter how young or old you are, every adult should have a Will. Even when you have a Will in place, it is important to review its contents every two to three years.
You should also review your Will when a major event happens in your life, such as times like these:
- Marriage for the first time and remarriage
- Re-marriage or cohabitation where you have children from previous relationships to provide for
- You or your children get divorced or separated
- You inherit some money
- The birth of a child within your family
- One of your named beneficiaries, executors or guardians dies or becomes incapacitated
- You move house
- You buy or sell a business
- You have to provide care for a family member
- You suffer illness or injury
It is especially important to make a Will if you are unmarried or you have not registered your civil partnership, as partners simply living together get nothing if not specifically provided for in a Will.
Not leaving a Will could leave your partner in financial difficulties or even homeless.
Wills can be an important tool to use to help you save inheritance tax.
Nowadays, all married couples and registered civil partners can have use of a transferable nil rate band, which gives a surviving spouse or civil partner a total of £650,000.00 (and potentially up to £1 million) in their estate, which is exempt from inheritance tax.
However, there are many other ways in which inheritance tax can become payable and many ways in which making a Will can help you avoid this and plan for other future eventualities.
This information refers to the law of England & Wales only, which from time to time changes. In particular, tax information changes annually. It is not a substitute for professional advice, which is up to date and specific to your needs. This information is a summary of the provisions relating to wills and cannot cover every aspect of their operation. It represents our understanding of current legislation in England and Wales but should not be relied upon as an authoritative statement of law nor as constituting advice. We would advise that legal advice be sought in every circumstance.
What are you worth?
The answer may well be rather more than you think; how much is your house worth for instance?
Values will inevitably change over the years, but it is helpful to know, in broad terms, the possible value of your estate so that, for example, we can advise whether inheritance tax is likely to be a relevant consideration.
Please remember that life insurance policies may form part of your property at death, but may be written for the benefit of someone else, for example your partner, husband or wife. In this case, such policies may not form part of your estate for probate purposes. This may result in a saving in Inheritance Tax.
Will I pay tax?
Not everyone pays Inheritance Tax. It is only due if your estate – including any assets held in trust and gifts made within seven years of death – is valued over the current Inheritance Tax threshold. IHT is payable at 40% on the amount over this threshold.
Inheritance Tax planning is an important consideration, and we can advise you on the legal aspects of this. To ensure that you are properly advised financially we will work alongside your existing adviser or introduce you to an adviser who specialise in this work, if you do not have your own.
If your interest is in limiting the amount of tax you and your beneficiaries will pay to the Government, it is important to utilise the legal and financial frameworks available to you to achieve this.
Can I leave someone out of my Will?
One advantage of making a Will is that you can choose who will benefit and who will not. The Intestacy rules will automatically apply if you do not make a Will. There is one exception. If you fail to make provision for someone who is financially dependent on you, for example your spouse or children, such dependants may be able to apply to the Court for a share of your estate.
How should I divide my estate?
This is entirely a matter for you. There are 3 common kinds of gifts:-
- The gift of some specific property eg a picture or jewellery
- The gift of a sum of money
- The residue, that is everything left over after all the debts have been settled and the other gifts paid out
Because of the effects of economy, you may wish to specify substantial legacies as a proportion of the whole rather than as a specific sum.
Do I need an Executor?
Yes. Your Executor has the responsibility for dealing with your estate in accordance with your Will. Your Executor has to comply with the formalities and obtain a Grant of Probate from the Probate Registry. You may choose to have more than one Executor. Where your beneficiaries include children under 18 years or someone incapable of looking after their own affairs, you will need at least two Trustees. Executors and the Trustees are sometimes the same people.
You may appoint your husband or wife, or one of your children as Executors, as they should be someone you trust and someone you think would be capable of dealing with this kind of task. It would be a good idea to find out whether they would be willing to act. Someone appointed as Executor in a Will has the right to renounce that appointment if they do not wish to act. Remember, being an Executor does not stop that person benefiting under the Will.
The Directors of Onions & Davies are generally willing to accept appointment either on their own account or jointly with a named person. We would make a charge for work carried out in our capacity as Executors, in the same way as we would if Executors asked us to act on their behalf. The advantages of having professional Executors are that you can be sure that they are independent, having no conflict of interests and also that they are legally accountable for the proper administration of your estate.
Appointing a Guardian
For parents of young children it is perhaps even more vital to make a Will, as it allows an opportunity to appoint Guardians to act if your spouse/civil partner were to die before you.
If you do not have a Will, other family members may decide who takes on this role and this is not always satisfactory. The choice of Guardian, like any important decision, regarding your children’s welfare, should be made by you as the parents.
Appointing a Guardian is straightforward, but it must be done correctly. We will make a note of your wishes by including a special clause in your Will. You can, if you wish, include substitutes in case your first choice of Guardian is unable to act. You can also ensure that money is made available to meet your children’s financial needs as they grow up.
If you would like to appoint Guardians please discuss with them their willingness to be appointed.
Unmarried couples and couples not in a Civil Partnership
If you are unmarried or not in a Civil Partnership, you cannot leave your property to your partner unless you make a Will.
Where the Intestacy rules apply, the surviving partner may have to go to Court to apply for a share of the estate. To be eligible, the surviving partner would have to be able to show some financial dependence on the deceased person and prove a closeness of relationship with him or her over a number of years.
In the eyes of the law, a couple who are living together have none of the automatic rights of a married or civil partnership couple when it comes to sorting out a deceased partner’s estate.
For example, the legal beneficiaries may legally enforce the sale of the property occupied by the surviving partner.
We often see long-running family disputes surface in these circumstances, which can be tremendously difficult, traumatic and costly for the families and former partners and damaging to long term relationships, even after a resolution is achieved.
If you don’t have a will there are rules for deciding who inherits your assets, depending on your personal circumstances.
The beneficiaries will comprise only a surviving spouse (or civil partner) or people who are blood-related to you. Even a surviving spouse may not receive everything you leave – it depends on whether or not you leave children as well and also on the value of your estate.
It will take longer to sort out your affairs if you don’t have a Will. This could mean extra distress for your relatives and dependants until they can draw money from your estate.
Changing your Will
It is advisable to review your Will from time to time to ensure that it reflects changing circumstances. Typically we advise our clients to review their Wills every two to three years.
You should always consider making a new Will if your circumstances change in any important way. For example, if you marry, your earlier Will is likely to become invalid. If you divorce, the effects of your Will on beneficiaries is likely to change. If you separate, or there are new family or friends to provide for, or your financial circumstances radically alter, then you may need to change your Will.
What you need to do
There are many pitfalls in preparing your own Will. For example, there may be some lack of formality which makes the Will invalid. Words you use may, legally mean something different from what you intended. Having seen both these problems arise in practice, it is our strong advice to use a solicitor.
Have you considered making a Lasting Power of Attorney?
our Will will be effective only from the moment of your death. There is a procedure whereby you can appoint someone to look after your affairs if you cannot do so yourself, for example as a result of dementia, or stroke, or brain damage following an accident or because you become frail with advancing years.
Very real problems can and do arise in sorting out the financial and property affairs of people in this situation. Making a Lasting Power of Attorney is an effective form of insurance that if this situation should arise in your own life, there will be no complications and the person of your choice will be handling your affairs.
LPAs can cover not only property and financial affairs but also health and welfare issues. It is often sensible to consider making an LPA at the same time as making a Will.
This information refers to the law of England & Wales only, which from time to time changes. In particular, tax information changes annually. It is not a substitute for professional advice, which is up to date and specific to your needs. This information is a summary of the provisions relating to making wills and cannot cover every aspect of their operation. It represents our understanding of current legislation in England and Wales but should not be relied upon as an authoritative statement of law nor as constituting advice. We would advise that legal advice be sought in every circumstance.
© 2018 Onions & Davies. Onions & Davies Solicitors is the trading name of Onions & Davies Ltd, Company Reg. No. 8322297, Registered Office address: 91 Cheshire Street, Market Drayton, Shropshire, TF9 3A. Onions & Davies is authorised and regulated by the Solicitors Regulation Authority (SRA ID Number: 607617)