Everyone should have a Will, and you should give some thought to what you want included in your Will. Here are eleven steps to help get you started.
1. Make a list of who you want to benefit from your estate
You should make a list of all the people you wish to leave money or possessions to, these people are known as ‘beneficiaries’. You might include:
- your partner or spouse
- children and other family members
2. Write down your assets and what they’re worth
Assets include - property, savings, occupational and personal pensions, insurance policies, bank and building society accounts, shares, bonds, funds, jewellery etc.
Start with assets that are easiest to value; savings and valuable objects. Then move on to the assets that might change in value. These will be harder to estimate and include:
- property – house or land
- stock market investments – shares, bonds, funds
- your business – if you own or part-own one
- your pension – if the rules allow (you will need to check)
Lastly, think about any sentimental items that you want particular people to have.
3. Think about how you want to split your assets
There are broadly 5 types of legacy you can leave.
- A ‘pecuniary bequest’ – a fixed sum of money
- A ‘specific bequest’ – a specific item which you own
- A ‘residuary bequest’ – a percentage or share of your estate after any debts, costs, liabilities, legacies and tax have been paid.
- A ‘reversionary bequest’ – a gift to one person and then to a second person upon the first person’s death. “”.
- A ‘trust’ – a legal arrangement where you give cash, property or investments to someone else so they can look after them for the benefit of a third person at a specified time.
If your affairs are comparatively simple (e.g. you want to leave everything to your spouse), it’s likely you’ll use residuary bequests. If things are more complicated, you’ll probably use a combination.
4. Check if you’ll have to pay Inheritance Tax (IHT)
The IHT threshold is currently £325,000 for an individual and can be transferred to a spouse or civil partner if it isn’t used up on the first death. If your estate is worth more than this when you die, IHT (currently 40%), will have to be paid on the excess.
From 6 April 2017, a new tax free allowance of £100,000 will give each individual an additional allowance to be used against their home, provided they leave it to their children or grandchildren. Again, this allowance can be transferred to a spouse or civil partner if it isn’t used up on the first death.
The rules aren’t straightforward so you will need to get professional advice.
5. Think about protecting your beneficiaries
Sometimes you might want to set some safeguards on your bequest – e.g., if you’re leaving something to a child or someone with disabilities or mental health issues.
Many people handle these issues by setting up trusts: this means that what you leave can be managed by people you trust to act in the best interests of your beneficiary, either for good or until a time when they can look after themselves.
6. Who should look after any children under 18
You will need to make a decision about who should look after your children if you die (appointing a guardian(s)), and making proper financial arrangements for them as they grow up.
‘Executors’ are the people who will be responsible for carrying out your wishes, for sorting out the estate and for distributing your wealth when you die. They will have to collect together and value all the assets of the estate, deal with all the paperwork and pay all the debts, taxes, and funeral and administration costs out of money in the estate. They will need to pay out the gifts and transfer any property to beneficiaries.
8. Write your Will
If your estate is quite simple (e.g. you’re leaving everything to your partner), you can probably do it yourself. The more complex your financial affairs, the more sensible it is to take advice from a solicitor or Will-writing service.
9. Ensure it is Valid
In order for a Will to be valid, it must be:-
- Made by a person who is 18 years old or over
- Made voluntarily and without pressure from any other person
- Made by a person who is of sound mind - fully aware of the nature of the document being written or signed and aware of the property and the identity of the people who may inherit
- In writing
- Signed by the person making the Will in the presence of two witnesses
- Signed by the two witnesses, in the presence of the person making the Will, after it has been signed. As soon as the Will is signed and witnessed, it is complete.
Although it will be legally valid even if it is not dated, it is advisable to ensure that the Will also include the date on which it is signed.
Although a Will can be revoked by destruction, it is always advisable that a new Will should contain clause revoking all previous Wills and codicils. Revoking a Will means that the Will is no longer legally valid.
If you want to destroy a Will, you must burn it, tear it up or otherwise destroy it with the clear intention that it is revoked. There is a risk that if a copy subsequently reappears (or bits of the Will are reassembled), it might be thought that the destruction was accidental. You must destroy the Will yourself or it must be destroyed in your presence.
10. Get your paperwork together
You know where you keep your paperwork, but your executor won’t - you need to let them know where you keep important documents such as:
- Bank/credit card statements
- mortgage information
- property deeds
- outstanding bills
- details of savings and investments – things like share certificates, Premium Bonds and pension plan statements
- insurance policies
- tax certificates such as your P60
- birth and marriage certificates
- divorce papers
11. Review your Will regularly
When a Will has been made, it’s a good idea to review it regularly to make sure it takes into account a change in circumstances, and still says what you want it to say, particularly when:
- you have new children or grandchildren – you may want to change who gets what
- you get married – marriage revokes a Will in England and Wales (but not Scotland)
- you get divorced – getting divorced doesn’t revoke a Will, although in England and Wales your ex husband/wife or civil partner wouldn’t benefit from it
- someone named in your Will dies
You must not update your Will by amending the original Will after it has been signed and witnessed. Any obvious alterations on the face of the Will are assumed to have been made at a later date and so do not form part of the original legally valid Will.
The only way you can change a Will is by making:-
- A codicil to the Will – a supplement which makes some alterations but leaves the rest of it intact e.g. to increase a cash legacy or change an executor. It must be signed by the person who made the Will and be witnessed in the same wayA codicil to the Will – a supplement which makes some alterations but leaves the rest of it intact e.g. to increase a cash legacy or change an executor. It must be signed by the person who made the Will and be witnessed in the same way
- A new Will - If you wish to make major changes to a Will, it is advisable to make a new one. The new Will should begin with a clause stating that it revokes all previous Wills and codicils. A new Will - If you wish to make major changes to a Will, it is advisable to make a new one. The new Will should begin with a clause stating that it revokes all previous Wills and codicils.
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If you would like to know more about how to leave a gift towards our work please feel free to get in touch with the gifts in Wills team firstname.lastname@example.org - we're always happy to help.