Where There's a Will...
WRITING A WILL - Why do I need one
So that you can be sure who will benefit from your estate when you die
To ensure any minor children are appointed with a Guardian and so not taken into care
To ensure that your spouse receives the relevant part of your estate as without a will, they may not
If you are unmarried, your common law partner may not receive anything
To let your loved ones know any specific wishes for your funeral and what you would like to be done with your body
To plan for Inheritance Tax to ensure your estate does not pay more tax than it needs to
Your executor(s) can start distributing your estate under probate quicker than they would be able to without
If you die without one, the law states who gets what! This is called intestacy.
Most people avoid making a will because they think death won’t happen to them yet! They also don’t realise that dying without a will could mean that their assets may not be given to the people left behind and could partially go to the State. We all have a tendency to bury our heads in the sand.
However, if you have assets, it is imperative that you decide who gets what and making a will may avoid any possible disputes between relatives. You also need to think of your children and who will look after them when you are gone and what provisions will be made for their financial welfare.
Anyone over 18 (members of the armed forces could do so younger) could benefit from a will, especially those with dependants. There may be some Inheritance Tax planning opportunities to consider with your estate also. Inheritance Tax is due when a person’s estate is worth more than the current threshold of £325,000, at a rate of 40%, which will be due out of the estate funds within 6 months of death. There is also an additional nil rate band available on your main residence. However, if you have a considerable estate value, this could still leave your beneficiaries with a lot less than you intend and a tax debt that they may not be able to pay if your assets are not in cash, ie if the estate consists solely of the family home but no money to pay the tax, it could force the sale of the family home. (In this instance though, there are concessions to spread the tax payment up to 10 years).
It is very easy to make a will, the hardest part is deciding who you would like to have what. You should make a thorough list of all your assets and think about what provisions are in place for any dependant relatives. You can get a solicitor or professional will-writer to help you write a will or you could write it yourself, provided you get it formally witnessed and signed by two witnesses, but they should not be one of your beneficiaries, spouse or civil partner. You will need to appoint an Executor (someone who will carry out your instructions). You just need to ensure that it will be interpreted how you want it to be.
You should speak to your personal tax adviser about what you should consider when making your will and keep your head out of that sand to give you peace of mind. It might be a good time to consider making your Lasting Power of Attorney too.
For some easy further reading see https://www.gov.uk/make-will/overview
FUSE is an independent Chartered Certified firm of accountants and tax advisors based in Highgate Village, North London. We provide a dynamic range of services to clients working in property, media, entertainment and professional services. Our clients vary in size from self employed sole traders, small enterprises and medium size businesses. We believe that comprehensive financial planning and sound business financial advice are the keys to growth and profitability.