An extraordinary time like this has focused people’s thoughts on how best to provide for their loved ones. There is an assumption that without a will, the law will automatically carry out our wishes. But this is not the case. If you haven’t already, it is best to take time to consider the contents of your will now. In your will you will need set out what you want to happen in such areas as:
• Which relative gets what and in what share
• Which charities or other good causes should receive part of the estate
• You can decide who will be the people to sort things out after you have gone (your executors).
The importance of a will
One common scenario of how unpreparedness can lead to disappointment occurs when couples who have been living together think that their assets automatically pass to each other if one of them dies. If they are not married or in a civil partnership, this is not the case. Making a will is essential in these circumstances.
Clearly every parent hopes to be able to care for their own children into adulthood, but it is important to make preparations to choose who should be the guardian(s) if the worst should happen before a child reaches 18 years old. Substitute guardians need to be appointed in a will in case circumstances change. Most parents would prefer to make these decisions themselves, rather than leaving the choice to others.
There have also been cases where children have, for example, not been allowed on trips as there was nobody legally able to sign as a guardian when the parent had died leaving no will.
Tax benefits
Clearly the main purpose of a will is to provide for family, friends and loved ones. However, there may also be charities close to a person’s heart and it is often when a person dies that s/he may wish to provide for such charities. All donations to charity are tax-free. In addition, if there is inheritance tax payable when a person dies, this can be reduced by gifts to charity. The present rate of inheritance tax payable where applicable is 40 per cent tax. This can be reduced to 36 per cent where the gift to charity forms over ten per cent of the money a person leaves, according to the formula set out by law.
The best tax planning is done before you die. If you think that tax may be an issue for you it is wise to seek professional help as soon as possible.
A simple process
People often assume that making a will is expensive and complicated, but this does not need to be the case. For simple cases it is possible to buy DIY kits from shops and there are also websites that give a lot of information about how to do your will. It is possible to put together a will completely free of charge through online sites, but choose carefully. If you have any complicated family circumstances – for example, if you have remarried, have a dependent with a long-term disability, there are inheritance tax issues or you own a property abroad – it is wiser to seek professional help. There are also online will writing services supported by legal professionals that can be helpful – these are either free or at a very reduced cost.
Keeping up to date You need to ensure your will is up to date, especially if you have married, or been divorced. You might also consider putting your adult children down as the executors instead of your mum and dad! Grandchildren are often a reason why people wish to make changes to include their growing family. Making a will is important at any stage of life and does not need to be stressful. Although it is important to live in the moment, especially during these uncertain times, planning for the future is equally as important. Having a will gives peace of mind that your wishes will be carried out and makes the process of sorting things out after you have gone much quicker and less stressful for your loved ones left behind.
Sarah Steel is a qualified solicitor and has spent many years specialising in wills, tax planning and lasting powers of attorney. She is currently part of the team at wellsburcombe.co.uk
