Writing a will is the foundation of estate planning. It is the beginning of taking charge of what happens with your wealth after your death.
Many people incorrectly assume that you should only write a will when you get to a certain age. Instead, you should write a will if you have children or a partner to ensure they are cared for after your death. If you have assets, you should write a will to ensure they are distributed as you intend.
A will is a legal document that sets out your wishes after death. Once the inheritance tax has been claimed, your remaining assets are split as per the specifications of your will. You can bequeath any amount of your assets to whomever you like in your will.
If the following circumstances apply to you, then you need to write a will:
If you have people who depend on you for care, you must write a will to ensure they are taken care of after your death. This may include naming a guardian and setting up a trust for their future or care. Of course, you should speak to potential guardians to find out if they are willing to be named as guardians. You should also strongly consider life insurance if you have dependents. This will give them a payout after your death that can be used for their care.
While a spouse is usually well-protected if there is no will, having your wishes laid out will prevent disputes after death. Your will should specify what happens with your share of jointly owned assets like a house or retirement funds. You cannot assume that this will automatically go into their name. The last thing you want is for your grieving spouse to sell your house because your family received a share of your home. A will is essential if you are not married or in a registered civil union with your partner. They will not have automatic rights to your estate, so if you plan to leave them anything, you need to include it in a will.
Once you start accumulating assets such as property, shares and bonds, retirement funds, and large amounts of cash, you need to create a will. You will have no control over how these assets will be split after your death and will not be able to make your estate tax-efficient.
You must have a will if you want to bequeath money to charity upon your death. You cannot rely on your family and friends to honour your wishes after your death, no matter how much you trust them. Creating a will is the only way to guarantee your wishes will be followed.
If you have family members to whom you do not want to give money, then you need a will. The closer this family member is to you in relation, the more important this is. For example, if you are estranged from a parent and have no spouse or dependents, they may be seen as your next of kin and have legal claims to your wealth after your death. Even if you told everyone that you want your brother to be your sole beneficiary, without written proof in the form of a will, your parents would receive an inheritance.
You may have friends who are as close to you as family. If you wish to leave something to close friends, you must write a will. They will not have a claim on your estate otherwise.
Even if there is a will, it can be contested, so it is essential to be very clear in your will and ensure you’re your attorney or executor has a copy of your current will. If you don’t have a will, you risk putting your loved ones through months or years of legal battles as people contest their share with other family members. Having a will helps avoid many legal conflicts in the first place.
If you die without a will, your assets will be divided as per intestacy law. This will consider the familial relationship between you and any beneficiaries, not circumstances or relationships. Most of your estate will go to your spouse or partner and any children if you are married or in a civil partnership. Intestacy laws provide for both biological and adoptive children, but not step-children. Most of your estate will go to your parents if you are unmarried. The crown will receive your estate if you are unmarried and have no living relatives.
You should update your will after every change of circumstance. Specific life events, such as marriage, will automatically invalidate your current will or mean that new family members are not provided for. In the UK, divorce will not invalidate a will, so if you do not want to leave your ex money, you should update your will. Generally, you should check your will every 2-5 years to ensure you are still happy with its contents.
However, you need to update your will after the following life events
Intestacy laws may apply if your will is invalid, regardless of your last wishes. It is essential to keep your will up to date with every change in circumstances to ensure that no one will claim that your will is invalid to try and increase their share.
Before you write your will, you need to prepare a list of what will be in it and your named beneficiaries. This will help you to create a clear will that will be difficult to contest.
Prepare the following things:
Decide on a guardian for your dependants
You should discuss this with your partner and any potential guardians to ask if they are willing to look after your dependants in the case of your death. Decide if you will create a trust for their care and/or a trust for their future.
Decide who will look after your pets
Again, you need to discuss this with the potential caretakers to ensure they are happy to do so. You may create a trust for the care of your pets to ensure their caretaker can afford vet bills, food, and other needs.
List out your assets, income, debts, and liabilities
Your beneficiaries will only split your estate after subtracting the debt, liabilities, and inheritance tax.
Decide who you want to be beneficiaries and what you want to leave them
Work out exact assets like properties or belongings.
Calculate even splits
Once you have worked out particular assets, you can then decide how evenly (or not, the choice is yours) you want the rest of your assets to be split. You may need to keep an eye on the values of assets as some may fluctuate over time.
The law sets out some basic requirements for a will in the UK. If any of these are not adhered to, then the will is invalid.
In England, Wales, and Northern Ireland, anyone over 18 can write a will. In Scotland, the minimum age is 12.
Scotland requires the will to be witnessed by one person. The rest of the UK requires two witnesses. The witnesses must be present when you sign the will and must not benefit at all from the will.
Writing a will does not have to be complicated. You can purchase a template in stationery shops for as little as £10. This is only appropriate for people with simple estates, which consist of their family home, retirement accounts, and some cash.
If you have a complex estate with many assets and many beneficiaries, it might be best to seek professional assistance to manage your posthumous wealth. You could seek help from a legal advisor or a financial advisor.
You need to choose an executor for your will, who will carry out your wishes and make the bequeathments. They will handle the finances of your estate, such as the inheritance tax. Your executor must know where to find the original copy of your will and any passwords that may be required to access it. If your will is contested, the original copy of the will must be presented for legal scrutiny. Most people will make two copies of their will to leave with their executor and their solicitor in case the original will is destroyed.
Keep up with our news, articles and latest developments!