Do you have a Will?
One matter to think about is your Will. Have you put a Will in place? Two out of three people haven’t so you wouldn’t be alone! If you have done a Will, great, but is it up to date? A Will is an important document and something that requires thought – not something to be signed as you go to step on the plane! Here are ten good reasons for making, or reviewing, your Will:
1. Don’t rely on outdated Intestacy Rules formulated in 1925: Without a Will, your estate is intestate. Society has changed quite a bit since 1925 and these rules only provide for nearest relatives in order, failing which your estate could pass to the Crown. The rules do not provide for unmarried couples, stepchildren or friends.
2. Providing for a spouse, civil partner: It is not definite that under the intestacy rules they will inherit your entire estate and this depends on whether you have children, the value of your estate and how the assets are owned.
3. You decide who benefits from your estate: You decide who will benefit and you can leave sums of money to friends, godchildren or charities.
4. Appointing Guardians for minor children: You can appoint guardians to look after your children until they are 18. Without this, the decision is made by a Court and could cause a dispute between families.
5. Choosing Executors/Trustees: With a Will, you decide who should administer your estate and deal with the paperwork – for example – you may want friends involved or professionals. They will also manage the financial side for any minor beneficiaries.
6. Providing for minors: Under intestacy, minors inherit at 18, which is quite young to handle the responsibility. With a Will, you can specify a later age, say 21 or 25, with your Trustees acting in a parental role in the finances whilst they are young.
7. Trusts: As well as providing for minors, trusts can be useful to provide for second marriages or putting a structure in place to provide for vulnerable beneficiaries.
8. Funeral wishes: Although hard to think of, it can be a great help to your Executors to know your wishes, from burial to cremation, to organ donation, to flowers and music.
9. Benefit from Inheritance Tax Reliefs: The nil rate band provides £325,000 tax-free. The newly introduced residence nil rate band (applies if benefiting direct descendants – children etc.) gives £100,000 per person which will increase to £175,000 per person by April 2020. All in all, this could result in estates up to £1m being Inheritance Tax free – although the relief is limited for estates over £2m. Other reliefs are available for those people owning trading businesses and those leaving 10% or more to charity.
10. Peace of mind! Get the right Will in place and get on the plane with peace of mind…