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Easy Guide to Making a Will

Most of us know that we should have a will, but few of us do anything about it. Approximately 80% of us in the UK do not have wills. This is a huge proportion of the adult population, especially when you bear in mind the implications of not having a will. But writing one can be very complex.

A will is a legal document that records your wishes for the distribution of your estate on your death. It states who you want to sort out your affairs, who you would like to act as guardians for your children and can give funeral directions. A will can also incorporate provisions to reduce inheritance tax.

Dying without a will, or “intestate”, can lead to many problems and expenses. By having a will, you can give a clear indication of your wishes and allow your family and friends to organise your affairs during a difficult time. During intestate cases, legal rules apply. These rules do not consider non-married partners and stepchildren, so your family could inherit your estate rather than your partner. He or she will then have to contest this in court to recover their share of the property and receive financial support from your estate. Even if you are married, not all of your estate will go to your spouse; it depends on the total value of what you own, what it is, how you own it and which other relatives survive you. If you have no living relatives, your estate will go to the Treasury.

Before making a will you should consider all the assets and liabilities you have. This can include your home, bank accounts, life assurance polices, credit card debts, to name but a few. By calculating the value of your estate you can estimate the inheritance tax due on your death. Inheritance tax applies to assets from an estate over £255,000 (2003/2004) and is charged at 40%. Probate cannot be granted until the inheritance tax has been paid. However, under a new agreement banks can release money directly from the deceased’s estate before probate. Probate is the legal release of the estate. The tax due must be paid 6 months after the death, and the beneficiaries of the will are liable. Your will is an opportunity to reduce the inheritance tax due by taking advantage of the allowances and exemptions available.

When making a will you should consider who will be guardians to any children under the age of 18 years. Appointments of guardians usually take effect after the death of the second parent. Their duties are the same as those of a parent – responsibility of the day-to-day upbringing of your children. You should also appoint substitute guardians in case circumstances change. If your wishes are to give assets to your children, you should not nominate guardians as beneficiaries. Your children should be named the beneficiaries, and the money held in a trust to be controlled by trustees. It is advisable to have separate guardians and trustees.

Alongside a will, you may also want to set up an enduring power of attorney. It states who you want to run your affairs if you are unable to do so due to illness or as you grow older.

A ‘living will’ has nothing do with your property or money. Also known as an ‘advance directive’, it is a legal document detailing your wishes to refuse all or some types of medical care and treatment in certain circumstances. A living will is important for those who have strong feelings about how they want to be cared for.

If you already have a will, you should make sure that it reflects your current personal and financial circumstances. A will is invalid if you have got married after it has been written or it has not been made under the correct procedures. And a divorce does not cancel an existing will! It is a good idea to review your will every few years, because inflation may have distorted a legacy, people named in the will may have died and tax changes may affect the inheritance your beneficiaries will get. You can update an existing will with an additional one, but it is advisable to re-make your Last Will and Testament.

A simple will is not difficult or expensive to draw up. There are do-it-yourself will-writing kits available in high street stores for under £10. There are also specialist will writing companies. However, an inaccurate or incomplete will can cause many problems. We recommend that you consult a solicitor and have a will drawn up professionally, particularly if your financial affairs are complicated.

If you would like to discuss inheritance tax planning or find a solicitor in your area speak to Ben Gibbs from Glazers Financial Services on 020 8458 7427, who will be happy to discuss the issues with you.

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