Despite Wills being a key part of effective estate and inheritance tax planning, many people do not fully appreciate the importance of having an up to date and valid one in place. In this article, we answer some frequently asked questions about Wills and discuss why everyone should have one.
A Will is a document in which you set out who you want to receive your assets when you die. These assets include everything that you own in your sole name (joint assets are treated differently), from savings and investments to properties. Within your Will, you also need to choose someone who will oversee the distribution of these assets. This person is known as an executor. Most people appoint two executors.
If you die without a valid Will, you will be said to die intestate. Dying intestate will delay dealing with and distributing your assets. More importantly, it means that you have no control over who deals with your estate and who benefits from your assets on your death. The rules of intestacy will dictate who receives your assets and how much they will receive. This won’t necessarily be what you intended.
Having a Will helps to make sure that your wishes are carried out after your death in respect of who benefits from your estate and what they receive. Having a Will avoids the delays and added complexity of dying intestate, and your executors can start dealing with your estate quickly.
A Will also gives more certainty to your loved ones who stand to benefit from your estate and gives you the peace of mind that your assets will go exactly where you want them to.
There are quite a few things to think about when making a Will including:
Who you want to deal with your estate following your death and appoint as your executor(s)
If you have children under the age of 18, who you want to appoint as their legal guardian
Who you wish to benefit from your Will and whether you would like them to benefit immediately or whether a trust arrangement is more suitable
If you want to leave a charitable legacy
If there are any individual items that you want to gift, for example, jewellery or artwork. You will need to revise your Will if these items are gifted or sold during your lifetime
Inheritance tax and how you can establish your Will and structure your assets to reduce the liability you could leave behind
An executor acts as the administrator of the estate. They have many responsibilities but the main ones include valuing the estate, paying any tax due, obtaining probate and distributing the estate in accordance with the terms of the Will. Many executors seek the assistance of a solicitor.
Often a trust is created within a person’s Will and the appointed trustees will take control of the assets passed into the trust and deal with them in accordance with the terms of the trust. In many cases, the executors of a Will and the trustees are the same people.
A trust might be created within a Will because the beneficiaries are too young to directly receive the assets. Otherwise, a trust is usually established within a Will to control how assets will be utilised in the future.
Once completed, a Will cannot be changed but it can be replaced at any time (as long as the person effecting the new Will has the mental and physical capacity to do so).
While a Will itself cannot be changed, a codicil to a Will can be written. A codicil is a supplementary document in which you can outline any minor amendments, such as changes to any executors or any beneficiaries. There is no limit to the number of codicils you can have but if lots of changes are made it may be simpler to write a new will. Any codicils should be stored with your original Will.
Not necessarily. A Will only covers assets held in your sole name. Assets held jointly usually pass automatically to the other owner (often a husband, wife or civil partner) and don’t follow the terms of your Will. Care should be taken with jointly held properties. Your share of a property held as joint tenants will pass to the survivor, regardless of your Will. On the other hand, your share of a property held as tenants in common will pass in accordance with the terms of your Will.
Assets that you have placed into trust are not part of your estate and therefore are not covered by your Will. This is because they are held by trustees and are subject to the terms of the trust, not your Will.
Pensions also fall outside of your estate on death and are not covered by your Will either. This is why it is extremely important to nominate a beneficiary with your pension provider so that the pension trustees know where you want your money to go when you die. While this is not legally binding, the trustees will be heavily guided by your nomination and examples where a person’s wishes have not been fulfilled are unusual.
Yes, it does. A marriage or civil partnership will revoke any former Will unless the Will is made in contemplation of marriage. This is when someone makes their Will prior to entering a legal union and inserts a clause acknowledging that it will take place to a specified person in the foreseeable future and that the marriage will not revoke the terms of the Will.
If making a Will in Scotland, it’s important to be aware of legal rights. Legal rights mean that when you die, if you are domiciled in Scotland at that time, your spouse and your children will automatically be entitled to a share of your estate regardless of whether or not you have a Will. A marriage or civil partnership does not invalidate your Will in Scotland. This is a complex area, so you may wish to consider seeking legal advice.
No matter where you live, it’s extremely important to review your Will if you are about or have recently entered a legal union, or are divorcing.
Mirror Wills are individual Wills, usually written by married couples or civil partners, leaving assets to the survivor on the first death, and then to an agreed third party (usually their child(ren)) on the second death. Mirror Wills can be individually changed at any time.
It is possible to make your own Will without legal guidance. It is, however, very easy to use ambiguous language, unintentionally omit assets or even invalidate the Will if it is not correctly signed and witnessed. For these reasons, it is usually advisable to ask a solicitor to draft and oversee the completion of the Will on your behalf.
For a Will to be valid and legal, it must be:
The process for signing and witnessing a Will must be carefully followed for it to be deemed as legal. It’s advisable to appoint a solicitor to make sure this is done properly and to avoid future issues or disputes.
A Will should be kept in a safe place that can be easily accessed in the event of your death. Many people ask their solicitor to store their Will. It is extremely important that your executors and possibly your relatives know where your Will is kept.
If you would like to discuss your estate and inheritance tax planning, our experts can help. Book a free consultation online now or call us on 020 7189 2400.
Issued by Tilney Financial Planning Limited.
Wills are not regulated by the Financial Conduct Authority.