It’s often misunderstood that when you die, your assets will automatically go to your loved ones, however this isn’t always the case. Creating a Will ensures that you have complete control over who inherits from your estate and will make sure that those you want to be looked after are taken care of.
With an ever-changing society, putting measures in place to protect your family and your wealth has never been more important, so we’ve pulled together the key things to consider when writing a Will.
Make A List Of All Your Assets
The very first thing you should be consider when writing a Will, are the assets that make up your estate and how much everything is worth when combined. Assets that are usually written into a Will include:
- Your main residence, plus any other property you own
- Savings: this can include savings in banks and building societies
- National savings, such as a premium bond
- Pension pots
- Insurance and endowment policies
- Stocks, shares, and investment trusts
- Business interest
- Foreign assets
- Any vehicles you own
- Smaller personal possessions such as jewellery and antiques
- Other household items you may wish to pass on.
Getting a better understanding of your estate can ensure that nothing is missed from your Will that is important to you. As the value of assets can change over time, it’s a good idea to make sure everything is regularly reviewed.
It’s also important to note any debts that may be included. Ranging from mortgages, credit cards, bank loans, and even equity release should be considered when getting an overall view of your estate.
Consider The Tax Implications
If you live in the England and Wales, it’s important to be aware that any assets included in your estate may be subject to UK Inheritance Tax. Inheritance Tax (IHT) is paid on the value of the estate of someone who's died. Inheritance tax can therefore significantly reduce the amount the beneficiaries receive.
It’s advisable to review your Will with a professional, and ensure it’s prepared in the most appropriate and tax efficient manner. There are many tax reliefs you can use dependent on your circumstances for example:
- Spousal exemption – If you’re married or in a civil partnership no tax is payable on first death if assets are transferred to the surviving spouse. However, if your spouse or civil partner isn’t UK domiciled, the rules are more complex and this allowance will be restricted
- Trusts - Trusts have a wide variety of uses and can be used to make provision for children, grandchildren or vulnerable adults in a way which allows you to retain control of the assets while still excluding them from your estate for IHT purposes.
- Gifts to charities – If you leave at least 10% of your taxable estate to a UK registered charity, then the overall rate of IHT is reduced to 36% from 40%
- Business proper relief (BPR) – Relief is given at a rate of 100% on certain business assets such as shares in an unquoted trading company, and interests in a business whether carried on as sole trade or partnership
- Agricultural property relief (APR) – Relief is given at a rate of 100% on qualifying farmhouses, farm buildings and farmland provided they’re used for agricultural purposes even if the owner isn’t the farmer.
Being aware of the potential tax implications of leaving assets in your Will ensures that the value of your estate isn’t unnecessarily reduced before reaching those you wish to benefit.
Discuss Your Plans With Family And Loved Ones
Talking is key. Keep your family updated on your financial plans to manage everyone’s expectations.
Clear communication can help your loved ones understand any decisions that may impact them now and, in the future, avoiding disputes in the years to come. It can also help with their own plans and open other options they hadn’t considered before. Knowing they have extra capital may influence decisions they make about their career, where they live, and life choices for their own children.
Choose An Executor
When writing your Will you need to appoint an executor, who will be responsible for dealing with your estate after you have died. The role of executor is fairly demanding and can involve handling large sums of money. Because of this, it’s a good idea to check with the people you choose before you put them forward for the role. A professional executor can often be a good option if your estate is complicated or there are difficult dynamics within the family.
Take Trusted Advice From A Professional
We’ll take the time to get to know you and understand what you would like to happen after your death so you can rest assured your loved ones will be taken care of.
Review Regularly, And Update When Things Change
We understand that life constantly changes. You may have separated from your spouse or partner, cancelling out previously existing Wills, you may have welcomed new grandchildren, nieces or nephews, or stepchildren. Or your adult children could have got married, and you’re worried about passing on wealth in the event of a relationship breakdown.
It’s therefore hugely importance your Will is kept up to date to ensure no tax planning opportunities are missed or your Will fails to benefit the right people.
Writing a Will doesn’t have to be difficult. Our solicitors offer several services to make the process convenient for you. We're one of the UK’s leading law firms, and our specialist Tax, Trusts & Estates team located across multiple offices has extensive experience with Will writing. We can help with either preparing a first Will or update an existing Will.
Contact Us Today
Contact us today for help and advice on writing a Will. You can call us on 0370 1500 900 or contact us online.
Supporting You And Your Family
Future planning is one of the biggest investments you can make – not only for yourself, but for your loved ones as well. Please visit Supporting You And Your Family for more ways you can plan for the future.