What You Should Include When Making Your Will
Understandably, since the start of the Coronavirus outbreak, we’ve seen an increase in clients making their Wills. But it’s not always easy to know what to include in your Will. There are a number of important decisions to make. And you need to make sure the wording of your Will reflects exactly what you want. Unambiguously.
Our short ‘checklist’ below is designed to help you with the process.
Beneficiaries – Who to Leave What To?
If you leave your estate to more than one person, you’ll need to think carefully about how you’d like your assets to be distributed. It might seem unnecessary to draw up a list. But recent births, deaths, marriages, divorces etc, may influence who you’d like to include in your Will. Don’t worry, it’s not necessary to specify the details at this stage. Simply concentrate on who’s involved and make sure you haven’t forgotten anyone.
If you want to exclude someone from your Will, it’s rarely simple. Take specialist legal advice to mitigate a challenge down the line.
Assets – Everything You Own
List what you want to leave to family, friends and charity. Start with the obvious; property, vehicles, savings, investments, pensions and shareholdings. If you own a business, you’ll need to think about how to pass your interests on.
Next, work your way down a list of smaller, more personal items such as jewellery and heirlooms.
Some assets can’t be left in a Will or are better dealt with in a trust or other way. However, focus on listing all your assets, so you know what your estate entails. Importantly, some types of jointly owned property will not pass under your Will. So, make sure you know ‘how’ you own your property.
Liabilities – Everything You Owe
It’s also important to make a list of all of your debts, including (not limited to) your mortgage, car loan/lease, credit cards, personal and student loans and outstanding taxes.
Naturally, your debts won’t be left to a beneficiary, but it’s important to estimate your overall financial status so you can plan accordingly. Funeral expenses, probate costs, and inheritance tax (IHT) are part of this process. Debts can become the responsibility of the estate, so many opt for life insurance to cover after-death expenses.
Executor(s) – Choose Carefully
As the person who carries out your wishes and distributes your estate after you die, your Executor(s) should be someone you trust. We’d recommend choosing two, but you can have up to four. You can choose a beneficiary, but they must be at least 18. It’s also a good idea to name an alternate executor in case your first choice can’t act.
Guardians – Who Should Look After Your Children?
If you have young children, your Will is the place to name their guardian(s). Think about how you want to provide for your children. For example, you may leave an individual in charge of the family home (left to the children in your Will) until they reach a certain age. Also, consider naming back-up guardians, should your first choice be unavailable.
The current IHT threshold is £325,000. So, if the total value of your estate (minus debts/loans) is more, it may be subject to IHT. Usually, married couples and civil partners can transfer their unused allowance to each other. This means that on the death of the surviving partner, the estate may be able to claim both allowances; currently £650,000. Additional tax relief, known as the Residence Nil Rate Band, may also apply. Depending on your circumstances, lifetime gifts and other provisions can help to minimise IHT. This is a complex area, so, once again we’d advise you to take specialist advice.
Lasting Powers of Attorney – Worthwhile?
Lasting Powers of Attorney (LPA) are as important as making a Will, arguably more. If you lose capacity without an LPA in place, your family can’t just gain control of your money, even if it is to pay for your care. They would need to apply to Court, which is often a time-consuming and costly process.
Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.