A will is a legal document you create that sets out instructions for who will inherit your estate and what should happen after you die. When you die without a will you won’t have a say in who receives your property and other assets.
Here’s why you should make a will as soon as possible:
- Avoid paying more inheritance tax than you need to with structured IHT planning within your Will.
The amount of inheritance tax that will be charged from your estate depends on how much you have, and also who you leave it to.
On first death, anything left to a spouse or civil partner will be automatically exempt from inheritance tax, but on the survivor’s death their estate will be the combined value of their own assets plus those of the deceased.
Leaving property to your children and grandchildren is also likely to generate a lower inheritance tax bill than leaving it to others.
- Decide who you would like to settle your affairs
Within your will, you can name an executor, or multiple executors, who will be in charge of carrying out your final wishes. Choosing your executor in advance allows you to select the best person for the task. It also gives the executor prior warning so they can prepare themselves.
As the role of Executor is extremely important, you should ensure that you choose someone who is honest, trustworthy, and organised (which may or may not always be a family member). You also need to consider if the person would still be capable of taking on such a responsibility at the time of bereavement and they are grieving – the role is a burden and can take many months to complete.
The Executor has a number of responsibilities, such as:
- making sure the property owned by the person who has died is secure, as soon as possible after the death
- applying to the Probate Court,
- collecting all assets and money due to the estate of the person who has died (including property)
- paying any outstanding taxes and debts out of the estate
- distributing the estate to the people who are named as beneficiaries in the will.
Having a Will also speeds up the probate process as your Will informs the court how you wished for your estate to be. If you don’t have a Will in place and pass away intestate, the law needs to decide how to divide your estate without your input, which can also cause long, unnecessary delays, especially if distant family members need to be traced.
- Prevent family disputes
Making a Will gives you the choice to decide who you wish to benefit from your estate, giving you the freedom of choice. Without a Will, the law decides for you in a strict family tree order. If you pass away without a Will and no living blood relatives your assets can vest in the Crown.
Not all families are perfect and without a Will your nearest relatives may inherit under the Intestacy Rules, however that may not be what you want.
By making a Will you can specifically exclude people who you do not want to inherit, who would otherwise stand to. For example, you might want to prevent an ex-spouse from receiving an inheritance. Or you may be estranged from a child or other family member and want to ensure that they do not benefit from your estate after your death.
Dividing up an estate can sadly sometimes lead to squabbles and arguments among your survivors if there is no will or your wishes aren’t made clear. Contested wills can be damaging to relationships among your family, and can also be expensive if decisions about your estate are legally contested.
- Make a will to name your children’s guardian.
When writing a will, you also have a say as to who should look after your dependents. If they’re under 18, you can also appoint their legal guardians.
If you don’t, the decision could be left to the family courts, who may choose a person you wouldn’t agree with. You may have named friends or family members to be your children’s godparents, but this is not legally-binding.
The surviving parent will usually get sole legal custody if one parent dies (as long as they have parental responsibility). But if both parents pass, this is one of the most important reasons to have a will.
A guardian will be responsible for all your children’s daily needs, including where they live, what medical treatment they receive, what school they attend, their diet and the child’s general care and development.
If you do not exercise your right to nominate a guardian in your will, a court will have to choose one for you. This could mean that your child may require emergency foster care whilst the Court makes that decision, and the end result may be that someone you would not have chosen may be appointed.
- Provide for your children financially
Ensure your children are provided for financially, as well as saying who will raise your children, you can make plans to provide for their future financially.
This might include putting aside money for their education, making sure they receive a set amount each year for clothing or hobbies, or establishing a nest egg to buy a home. You may wish to consider setting up a trust to provide for your children, as this gives you an element of control over when your children receive the money, and what it gets used for.
There are two ways to set up a trust: you can either establish it while you are still alive, or leave instructions for it to be established when you pass away.
- Provide for your dependents, including step-children.
Your step-children may be a big part of your life, or even be your only children, but the law states that only spouses or blood relatives can automatically inherit if there is no will.
If you want to provide for your step-children, you’ll need to write a will that includes them. The same goes for foster children, or any other dependents who may rely on you for support.
- Protect your partner and step-children if you’re unmarried
Unmarried partners aren’t entitled to anything from your estate unless specifically stated in your will – no matter how long you’ve been together and there is no such thing as a common law spouse. Writing a will ensures your partner will receive their fair share of your estate.
This is particularly important if the family home is one partner’s name.
As an unmarried partner won’t automatically inherit it if you die without a Will they may lose their home. You can make a Will and leave them a share of the property in your will, or a right to reside in the property. The above also applies to step-children.
- Protect your home from care fees
A study by NFU mutual estimated over 200,000 homes are sold or charged each year to pay for care fees. This is a staggering statistic and reflects 200,000 families a year who will not inherit as much as they had hoped for.
However, you can mitigate future loss to care fees by making your Will in the right structure. You can make provision for your beneficiaries and at the same time protect your assets. The care fee system is extremely complex; however, it is perfectly legal for a couple to arrange their Wills in a way which protects their share of their home from being used to pay care home fees.
This provides a comfort that their share of the property is available for the survivor to live in for as long as necessary, but doesn’t form part of the survivor’s estate, and therefore is not subject to means testing.
- Say who you want to look after your pets
If you have dogs, cats, or any other pets, they may also need to be looked after if you pass away.
You can name a beneficiary for your pet, leaving them to a trusted friend or family member. You can also ask that person to act as a caregiver for your pet. You can also create a Trust within your Will to leave funds to provide for your pet’s care, wellbeing, and potential vets bills.
- Protect your digital assets
Nowadays, your assets won’t just include money in the bank and physical goods. Digital accounts and online purchases, such as music, photographs, or websites, also form part of your possessions and can disappear into the void if you don’t account for them in your will.
Things like emails and social media accounts also form part of your legacy – do you want the information destroyed or protected, and do you need to make passwords available to your executors?
- Support a charity
If you support a charity, you may wish to leave something for it when you pass away. As well as supporting a good cause, you could potentially reduce the amount of inheritance tax paid by your family if you leave more than 10% of your assets to a good cause.
Only by making a Will can you make such gifts to a charity or charities close to your heart allowing your legacy to make a difference to a good cause that you value. By making a Will you can rest assured that your pledge will be used by the charity to help them continue the good work they do.
If you would like a free consultation or to discuss how Exclusive Legal can assist you in your conveyancing needs, please contact us via the website or call us directly.