Today sees the end of National Write a Will week, and shockingly around 70 percent of people in the United Kingdom, which equates to around 30 million people, do not have a will.
Of course the subject of writing a will is often dodged due to the morbid nature involved. However, writing a will is incredibly important for all people, no matter what state your finances are in. Without having a will that spells out exactly what you want done with your money once you die, your entire estate will be subject to intestacy rules, and they often don’t lead to a satisfying conclusion.
Not only is a will beneficial to your dependants, you may also find that less tax will be charged with the aid of a well written will.
First, let us examine the risks involved with not making a will.
If you don't make a will then come your passing you will be classed as dying 'intestate', and that means your assets will be distributed via the law, and not by your wishes. This seems straightforward but can often lead to complications, in this situation your estate will more than likely go to any living parents, as opposed yo a spouse or partner.
It would be safe to assume that if you have a family, a wife and children, your estate will pass onto them but again there often complications. In England, if you have funds of less than £250,000 then none of this will go to your children, it will all go to your partner. Your children will only receive an amount if there is more than £250,000, they will get what’s left over.
This is all well and good if you have an ideal family set up, however for people with less than perfect family situations there could be a bit of conflict, and a bitter battle over money is surely the last thing one would like to leave behind for their loved ones.
If you are not married but have a partner then you will find that they will receive none of your estate.
If you are unmarried and have no children then the estate could either be divided amongst various family members, or the government will take it all.
So all in all not having a will is not a very wise move, and could lead to arduous ordeals for loved ones already coping with your death.
To make a will you simply need to draw one up, have it signed by witnesses and make sure you meet all the requirements. Writing a will is certainly something you could do yourself, but it is recommended that you seek legal counsel to ensure you don’t phrase something in the wrong way and in turn suffer a legal avalanche.
When it comes to writing the will you have to be careful to tailor it perfectly so that your decisions can not be contested. Firstly, make sure you don't enlist any of your beneficiaries to help you draft the will, as this could led to contesting, the same applies for the witnesses, make sure they are not beneficiaries.
You will also have to decide who your executors are. Despite the chilling name an executor is simply someone who will administer your will after your death. This can either be done by a solicitor, a bank, or you could just ask a friend to do it for you.
With correct planning it is also possible to avoid leavings your family with in inheritance tax bill. Inheritance Tax is currently at a rate of 40 percent, and if you leave over £325,000 then this will be charged. However there are ways of avoiding this, by leaving the money to a spouse or partner you will incur no tax liabilities, if you need to leave money to your children speak to a lawyer or an IFA about setting up a discretionary trust.
Once you have written your will you can leave it with your solicitor, pay to have it kept in a bank or just keep it yourself. The latter option offers the least security.
Once the will is completed there may be times when it needs a review, if your circumstances change for any reason. For instance if you encounter marital difficulties you may wish to change will, or you may simply have minor amendment to make, such minor amendments are called a 'codicil'.
With a will in place you can enjoy your life safe in the knowledge that when you are no longer around the financial security you leave for your family will be free from contesting.
Discuss making a will with a recommended IFA today.