What is a Will?
Have you thought about who you would like to inherit from your estate when you die? Family? Friends? Or even charity? If you do not execute a Will, then your estate will follow the rules of intestacy, meaning your wishes may not be carried out.
A Will is a legal document which sets out instructions on how you would like to distribute your estate– giving you certainty and control over what happens to your estate when you die. You must be at least 18 to be able to make a Will. It is especially important for those who are not married, are in blended families, or have remarried with children from a previous relationship.
Why make a Will?
There are various reasons why you should make a Will, some of these are listed below;
- Appoint who you would like to manage your affairs when you die;
- It can reduce the chance of a dispute;
- Appointment of guardians for your children should you die before they reach the age of 18;
- Financially protect your children;
- It can safeguard the family home;
- Protect your partner if you are unmarried;
- Make specific gifts, whether that be personal possessions or of monetary value; and
- Make provisions for any pets that you own at the date of your death.
Inheritance Tax
Inheritance Tax is a tax on the estate of someone who has died, including all property, possessions and money. The standard Inheritance Tax rate is 40% and is only charged on the part of your estate that’s above the tax-free threshold, which is currently £325,000. It is worth noting that anything left to your spouse or civil partner is tax-free, and they can also inherit any unused allowance.
How will my Executors know what assets I have?
It is the responsibility of the Executor to locate all assets and liabilities of the estate throughout the administration period.
The Executor will be required to create an inventory to note the value and size of the estate at the date of death and use their finding to determine whether Inheritance Tax will be payable. There are various ways in which your Executor will be able to locate these, including;
- Thoroughly search through the deceased’s paperwork; and
- Engage with an Asset Search company who will search public and private records.
What is a beneficiary?
A beneficiary is a person who is named in a Will who will receive a benefit or gift from the estate upon death.
There are different types of gifts you can leave which could range from a gift of a specific sum of money, known as a pecuniary legacy; a specific item such as jewellery, car or family heirloom; or a percentage of your overall estate, known as your residuary estate.
If you die leaving no Will, the rules of intestacy must be followed. This means that without a valid Will, a surviving spouse will inherit the first £322,000 of the estate and half of anything above that. The rest of the estate will go to the direct descendants of the deceased (children, grandchildren etc).
If someone dies intestate, with no surviving blood relatives, their estate will be passed to the Crown.
Who can be a beneficiary?
Anyone can be named as a beneficiary. Many people leave their estate to family, whether that be a spouse, partner, or their children. For others, they would prefer their estate to benefit a charity. It is recommended that you name a replacement beneficiary should your primary beneficiary predecease you or cease to exist.
Can I exclude people from my Will?
You can exclude people from your Will for whom you do not wish to benefit from your estate, although this may be an emotionally difficult decision to make, the process itself is one that is relatively straight forward, so long as you have a Will.
Do I need to tell anybody I have made a Will?
A Will is a private document and therefore, you do not have to disclose the contents of the Will to anyone, however, it is recommended that you tell your Executor, or family member, where the original Will is so they can access this upon your death.