Everyone should have a will, especially if you have children or live with a partner. However, in practice we are shockingly bad at being organised – it is thought only 1 in 3 people in the UK actually have an up-to-date will in place. Here are some good reasons for making, or reviewing, your will:
Don’t rely on outdated rules: Without a will, your estate is intestate. Society has changed quite a bit since 1925 when these rules came into effect and they only provide for nearest relatives in order and, crucially, do not provide for unmarried couples, stepchildren or friends.
Providing for a spouse or civil partner: Without a will it is not definite that they will inherit your entire estate – this depends on whether you have children, the value of your estate and how the assets are owned.
Not married? If you are co-habiting but are unmarried you need a will to benefit your partner. You may also need to consider whether the survivor can afford to remain in the family home. Will inheritance tax become due? Is there a mortgage? Do you have sufficient life insurance?
Deciding your beneficiaries: Most of us have ideas already about to whom we wish to leave sums of money, including friends, godchildren and charities. Despite the best of intentions, you can’t rely on wishes being met accurately without the formality of a will.
Appointing guardians for minor children: This is a key reason to have your will agreed and in place. Appointing guardians to look after your children until they are 18 is an extremely important and personal decision. Without this, the decision is made by a court and could cause a dispute between families.
Choosing executors/trustees: Another important decision to make is who should administer your estate (and deal with the paperwork) – you may turn to trusted friends or professionals. They will also manage the financial side for any minor beneficiaries.
Providing for minors: Without a will minors inherit at 18, which is still 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.
Consider a trust: As well as providing for minors, trusts can be useful to provide for vulnerable beneficiaries or situations where you and your partner or spouse have children separately from each other so that you can ring-fence your estate to ensure that your children ultimately benefit.
Expressing your funeral wishes: Although hard to contemplate, putting down your wishes will inevitably be a great help to your executors, and to your peace of mind, from burial to cremation, organ donation, flowers and music.
Inheritance tax: The nil rate band provides £325,000 to pass tax-free. This applies for everyone. Other reliefs may be available depending on certain criteria being met (a residence nil rate band, a relief for trading businesses etc.) but as some of these aren’t automatic, it is important to take legal advice.
Make a start: Begin by listing everything you own including property, cash, shares and overseas assets. Use a professional to make sure that your will is comprehensive and valid and then review it regularly – especially if you get married, divorced, if you have children or purchase property. And keep it safe – but never in a safety deposit box. A bank cannot open a safety deposit box without probate, but probate cannot be obtained without a will!