Will Writing Help Guide
Why should I make a Will?
Making a Will is the only way you can be sure that your wishes will be followed after you die. If you don’t make one, part or all of your estate may go to people who you never intended to benefit. Not only that, Inheritance Tax legislation means that, if you don’t prepare properly, a substantial part of what you leave behind may go to the state.
How should I go about making a Will?
Thankfully it is easy and inexpensive to have a Will drafted by a properly qualified professional. You should check that the professional you choose:
• Has been trained and is qualified in making Wills
• Has undertaken on-going training in making Wills
• Has professional indemnity insurance of at least £2 million
• Is a member of an organisation that has an independent complaints procedure.
Solicitors who are members of the Society of Trust and Estate Practitioners and will writers who are members of the Institute of Professional Will writers meet these requirements.
What about home-made or online Wills?
While it is possible to draw up your own Will, Wills can be complex and some mistakes can render the Will invalid. If this happens, long and expensive court cases to resolve matters may result. In addition you may omit important details such as what should happen if the main beneficiary does not survive.
Increasingly it is possible to get your Will written online, but you should remember that a Will is an individual, personal document, that is tailored to suit your particular needs and it may be difficult for an online system to cater for this. In addition, questions need to be clearly understood before being answered, for example, if you were asked ‘how many children do you have?’ would you include natural children, step children, illegitimate children, foster children or adopted children?
Making a Will What should I consider when writing a Will?
Wills aren’t solely about passing on your assets. You can also include specific funeral arrangements: for instance, burial, cremation or the use of your body for medical research. You may also want to appoint legal guardians to care for your children if you and your partner should die before they are 18.
In your Will you can make provision for the age at which young beneficiaries receive their gift or share of the estate. You can also effectively provide for any beneficiaries with particular needs and for beneficiaries with means tested health provision or care provision.
One other important consideration is the appointment of your executors – the people who will deal with your estate in the event of your death. Ideally, these should be business-minded family or friends or could be professional advisers. If you want to appoint a professional adviser as an executor, make sure you find out their charges before doing so.
What else can I include in my Will?
You may choose to use your Will to pass on business interests: for instance, you could leave shares in the family company to a son or daughter who has come into the business. This is a very tax-efficient way to leave your assets to your intended beneficiaries. Personal items, like jewellery, paintings and heirlooms, can also be left in a Will, as can any gifts you wish to make to charity.
Can I leave money to my favourite charity or cause in my Will?
Yes. In fact, many people who give to charity choose to leave something in their Will to their favourite cause or causes, after they have made provision for their family and loved ones. Legacies from supporters make up a very important income stream for many charities. If you do want to leave something to a charity, the donation can be as small or large as you like.
What about Inheritance Tax?
Inheritance Tax (IHT) is the tax that is paid on your estate when you die, as well as on some assets that you may have given away during your lifetime.
Under current legislation, if the estate you leave behind is less than the ‘nilrate’ band there will be no IHT to pay, assuming that you have made no gifts in the seven years before your death. However, if your estate is worth more than the nil-rate band, IHT will be payable on anything above this. The nilrate band for the 2011-2012 Tax Year is £325,000 and the rate of tax is 40%.
There are many exemptions from IHT, including gifts to a spouse or charity. Further details are available on the Inland Revenue website: www.hmrc.gov.uk/inheritancetax/
Since October 2007, any unused nil-rate band from a late spouse or civil partner can be transferred to their surviving spouse or civil partner when they die. In effect, this increases the nil-rate band for the surviving partner.
Inheritance Tax is a complex subject, and if you have a potentially large estate you should seek professional advice.
What happens if my circumstances change?
You can easily change your Will at any time, and it’s important to review your Will regularly – at least once every five years. After all, life never stands still. Your family circumstances may change, as may the relevant taxation laws.
Will jargon buster
When it comes to making a Will, you might come across some terms you haven’t heard before. Here are the explanations for some of the most common terms used in Will making.
Beneficiary – This is a person, or an organisation, to which you leave something in your Will.
Bequest – This is a term for a gift that you leave to a person or organisation in your Will. There are quite a lot of different types of bequest. Here are a few of the main ones:
Residuary bequest – A gift made out of the residue of your estate. More than one gift out of the estate can be made either in equal portions or unequally by percentage.
Pecuniary bequest – A gift made of a fixed sum of money. Unfortunately, the effect of inflation means that the value of a pecuniary gift will decrease over time, although with appropriate wording this can be avoided.
Specific bequest – A particular named item left as a gift in your Will. For example, a piece of jewellery, furniture or a painting.
Codicil – A codicil is a document used to change a Will that has already been made.
Estate – Your estate is the total sum of your personal possessions, property and money minus any liabilities.
Executor(s) – This is the person or people that you appoint to ensure your final wishes are carried out. These can be professionals, friends, family members or institutions such as banks and some charities.
Guardian – Someone who is responsible for children until they become 18.Inheritance Tax – This tax is paid on the portion of your estate that is above the nil-rate band.
Intestate – This is the word used to describe someone who has died without making a Will.
Legacy – A legacy is just another word for a gift or bequest left in your Will.
Probate – When somebody dies leaving a Will, their executors will usually need to apply for a grant of probate. Once this is obtained, the executors can deal with the wishes expressed in the Will and distribute the gifts that have been left.
Residue – This is what is left of your estate after any outstanding debts, taxes, pecuniary and specific bequests have been distributed to beneficiaries.
Testator – This is the name given to a person who has made a Will.
Trustee(s) – One or more people who manage a Trust.