Most people recognise that making a Will is something they should do but for some reason only a minority (approximately one third of the population in the UK) ever get around to actually doing it.
Why should this be?
Probably the likely answer is that so many other things happen in our daily lives to get in the way and for some reason we do not like to think we will ever die.
The trouble is we will all die sooner or later – we just do not know when it will happen. It makes sense therefore not to put off making your Will as something you can deal with later – it could be too late!
The circumstances that would need to apply for NOT making a Will are:-
- You are not concerned as to who will deal with your assets when you die, how long it takes to deal with them, or how much it costs.
- If you have children under 16 you do not care who has legal guardianship for them and you are happy to leave this to Social Services or the Courts to decide.
- You have no views on who should receive your assets and are happy for Statute Law to decide who benefits – see Intestacy Guide.
- You are happy for the Inland Revenue to be a major beneficiary (in some cases the largest beneficiary) of your estate.
If the above circumstances seem perfectly reasonable to you then relax – you don’t need to bother!
However, how likely is it?
You are more likely to disagree with most if not all of the above and therefore you MUST make a Will – and do it sooner rather than later.
So, you have decided you will “grasp the nettle” and make a Will, and wonder how to go about it. Should you do your own, get a “kit” from W H Smith (or elsewhere), or consult a professional?
Without a doubt the answer is to consult a professional! The legal profession makes a substantial income from people who have drawn their Wills badly (or not at all) and a great deal of specialist knowledge and experience is needed to ensure a Will correctly meets the needs of the client and their wishes are not frustrated in any way.
Even so-called professionals can “get it wrong” usually as a result of being deficient in knowledge, experience or understanding (or all 3). It is a good idea to ask your adviser what qualifications and experience they have – for example the initials TEP after their name shows that your adviser is a member of the prestigious Society of Trust & Estate Practitioners and you can be sure that they are specialists in the area of Inheritance Tax Planning, Wills, Estates & Trusts.
Unfortunately this expertise comes at a price! The cost of making your Will (and any associated documents) will not be cheap and if it is you should ask yourself why. Similarly you must not think that the most expensive adviser will give the best advice – they are simply the most costly.
So you have now arranged to see a suitably qualified and experienced professional who will take you through the process but before you meet you need to be sure of your wishes and what your assets (and liabilities) are likely to be if you die.
It is quite likely that insurance will clear any mortgage or other borrowing and may provide additional funds.
Pension Funds may pay out lump sums on premature death.
It is always a good idea to check whether insurance policies are “written in trust” or whether a Letter of Wish has been completed for Pension Fund Death Benefit or Death in Service as this could have an impact on Inheritance Tax. Your adviser will certainly want to know so that Inheritance Tax advice can be given (if required).
Your adviser will also want to know your wishes as to:-
- Your Executor(s) – the person(s) that you trust to deal with your estate and wishes. The Executor can also be a beneficiary under your Will but if so it should be made clear whether or not the benefit is conditional on acting as Executor. If you create any kind of trust ideally you will need a minimum of 2 people to act.
- Funeral Wishes – it can be a good idea to specify these so that Executors and family will know what you want. However do not put too many details in your Will – a simple expression of wish as to burial or cremation (with ashes scattered or buried) is sufficient. It is preferable to leave suitable detailed wishes in a separate letter, particularly if you wish to donate organs etc, that will be read as soon as you have died. Always remember that your Executors are not legally bound to follow your funeral wishes.
- Guardian(s) for children under 16 – remember that you are not giving guardians financial responsibility (unless they are also Executors) but the responsibility for your children’s upbringing. However you should ensure (if possible) that money will be available to ensure that guardians are not placed at a financial disadvantage for bringing up your children. Remember also that legal parents (as shown on birth certificates) have parental responsibility.
- Gifts (of sums of money or possessions) – be sure whether beneficiaries need to satisfy a condition e.g. attaining age 21 before benefiting and be sure what is to happen if they fail to satisfy the condition. Also if money is to be invested until the beneficiary satisfies the condition be sure what is to happen to any income or capital growth. For personal possessions it is more flexible and convenient to leave these to your Executors to distribute in accordance with your known wishes (leave a Letter of Wish) so that you do not need to keep changing your Will if you change your mind.
- Residue (the balance left after everything else is deducted) – again be sure how this is to be shared (fractions or percentages) and consider alternatives should the beneficiaries die before you – even if this seems unlikely. Consider whether any conditions or trusts are to apply and the powers your Executors & Trustees will have.
- Inheritance Tax (IHT) – your Will is a very effective way of mitigating the effect of IHT particularly if you are married/registered civil partners so ensure you do not overlook this aspect if relevant to you – see Inheritance Tax Guide.
Congratulations – you have now made your Will and feel you can now forget about it.
Not so fast!
Life is not so simple and many things could happen that might change your wishes. For instance if you marry after making your Will it is automatically revoked (unless made in contemplation of marriage) so you would need to start again. Your financial position could change for the better (or worse). It is always a good idea therefore to review your Will at regular intervals (perhaps every 5 years) or whenever a major lifestyle change takes place.
So in conclusion the answer to the question “Who needs a Will” is most probably – YOU DO!