When you die your property, financial and personal affairs must be dealt with. By making a will you can ensure that your specific wishes for the division or disposal of your property, money and other personal possessions will be carried out by whoever you entrust the task to.
Contrary to popular belief, making a will is relatively straightforward and should not be put off as being unimportant. A will helps to simplify the administration of your estate and remove some of the stress and worry your family experience at a time of bereavement. It can also help to reduce the cost of dealing with your estate and careful planning can minimise inheritance tax liabilities.
What is a will?
A will is a legal document that dictates what should happen to everything you own after you die. A will appoints people to act as your executors – those who are going to be legally responsible for carrying out the instructions which you have left in your will.
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- A will gives your executors the legal right to bring together everything that you own so as to pass it on to those you wish to benefit, such as closing your bank accounts, transferring your shares or selling your house.
- A will can be used to appoint guardians of any of your children who are under 18.
- A will can incorporate inheritance tax planning measures in order to reduce any liability to inheritance tax that would otherwise reduce what you leave behind to your loved ones.
- A will can be used to cover different or unusual family scenarios and can incorporate different types of trust for this purpose such as a discretionary trust or a life interest trust.
- A will can be used to protect your assets from being used to fund care fees of a surviving partner so as to ensure that funds are left to be passed on to the next generation.
Why do I need a will?
You need a will if you have children, you are not married to or in a civil partnership with your “significant other”, you own a property or you have any items of value in your name, such as bank accounts, shares, premium bonds, insurance policies, personal possessions, cars.
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- Without a valid will in place, on your death the passing on of your assets is a more complicated exercise to carry out and a family member will need to apply separately to the court to be appointed to act in cashing in your assets. Your estate will then be distributed in accordance with the intestacy rules (statutory guidance which dictates who should inherit your assets and which applies when there is no valid will in place), regardless of your personal circumstances. This means that if you live with someone, whether you are married or not, and you have not left a will, they will not automatically inherit what you own.
- If you die without having a will in place the people you wish to benefit from your assets may not do so, because they are not entitled to them under the law. The intestacy rules may also result in complex trusts being set up which can be costly to administer.
- The absence of a will does not mean that your spouse or civil partner will inherit everything - they may not.
When do I need to update my will?
You should review your will regularly to make sure that it still contains your wishes but specifically you should update your will in the following situations:
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- on the death of a relative, named beneficiary or an executor; or
- if you get divorced; or
- if you get married; or
- if you have new children or grandchildren; or
- your financial circumstances change.