Safeguard your intentions and offer a clear guide for allocating your assets
Drafting a Will serves as a protective shield for your loved ones after your death, ensuring that your estate is handled precisely the way you wish. A carefully constructed Will safeguards your intentions and offers a clear guide for allocating your assets, thus mitigating potential disagreements or misunderstandings among your beneficiaries.
Additionally, a Will provides an element of security to your loved ones, ensuring they are appropriately cared for in your absence. Without a Will, the law takes over the division of your estate, which may not necessarily reflect your personal wishes.
Ensuring that your assets and possessions, also known as your ‘estate’, are inherited by your chosen beneficiaries is vital to planning for the future.
Your estate can encompass various aspects, including:
Property holdings (both domestic and international)
Savings and investments
Risks of dying intestate
Without a legally valid Will, sorting out your affairs after your death could become a challenging task for your family. In such cases, your estate is divided according to intestacy rules. These rules only permit married partners, registered civil partners, and certain close relatives to inherit your estate.
If you’re cohabiting with your partner without being married or registered in a civil partnership, your partner won’t have any legal rights to inherit despite living together.
It’s crucial to prepare a Will if you:
Own property or a business
Possess savings, investments, or insurance policies
Consequences of dying without a Will
In England or Wales, if you die without having a valid Will, the law decides the allocation of your assets. Should you not have any living family members, all your belongings and properties are forfeited to the Crown.
Creating a Will also helps you avoid paying more Inheritance Tax than necessary, making it an integral part of your financial planning. A will not only expresses your wishes but also ensures that your estate isn’t distributed according to the rules of intestacy, which may not align with your preferences. Without a Will, the state controls inheritance, potentially leaving your loved ones, friends, and favourite charities empty-handed.
Importance of a Will for same-sex partners
Having a Will is particularly crucial for those who aren’t married or in a registered civil partnership. This is because the law doesn’t automatically recognise cohabitants as having the same rights as married couples and registered civil partners. Therefore, your long-term cohabitant could be left with nothing if you haven’t made a Will.
Estate planning for dependents
A Will is also vital if you have children or dependents who cannot care for themselves. Without a Will, there could be uncertainty about who will look after or provide for them if you die.
While it’s a tough subject to think about, death is inevitable. Planning ahead can provide you with peace of mind, knowing that your loved ones will be financially secure without you. It also removes the stress of monetary worries during a difficult time.
Inheritance Tax and exempt beneficiaries
If you leave everything to your spouse or registered civil partner, there’ll be no Inheritance Tax to pay, as they are classed as exempt beneficiaries. Alternatively, you may use your tax-free allowance to give some of your estate to someone else or a family trust. Remember, Scottish law on inheritance differs from English law.
Taking control of your legacy
When planning your Will, consider what you want to be included:
Evaluating your financial situation, including money, property, and possessions
Identifying who you want to benefit from your Will
Designating guardians for any children under 18
Choosing an executor to manage your estate and carry out your wishes after your passing
Role of the Executor
Executors are individuals named in your Will to fulfil your wishes after your demise. They handle all aspects of settling your affairs, such as arranging your funeral, notifying relevant parties of your passing, collating information about your assets and liabilities, handling tax bills, paying off debts, and distributing your estate to your chosen beneficiaries.
Legacies in your Will
You can include various types of gifts, known as ‘legacies’, in your Will. For instance, you may wish to bequeath an item of sentimental value to a specific person or a fixed cash amount to a friend or favourite charity. You can also dictate who should receive the remainder of your estate and in what proportions. Once your Will is drafted, it’s crucial to store it safely and inform your executor, close friend, or relative of its location.
Reviewing your Will
It’s advisable to revisit your Will every five years or after significant life changes such as separation, marriage, divorce, having a child, or moving house. Any changes should be made via a Codicil (an addition or amendment to a Will) or by drafting a new Will.