Believe it or not, a will is extremely important. If you have not written one yet, here is why you should do so as soon as possible.
If you die without a writing a will you are considered to have died “intestate”. This means the law decides how your estate is passed on – even though it may not be what you wanted.
If you pass away before your spouse and children your personal possessions and all assets valued up to £250K goes to your surviving spouse or registered civil partner and everything else is split equally between your spouse and your children. However, your spouse’s half will belong to him/her under lifetime interest. This means your spouse cannot sell or spend the assets, but he/she can draw income from it. If your spouse dies, your children will receive the full benefit of the life interest.
If you pass away before your spouse, but you have no children, everything under £450K will go to your spouse and the remaining money will be shared amongst your parents and your spouse.
If you succeeded your spouse, but you have no children or parents your estate will go to you your spouse.
If you have no spouse or children your assets will go to your parents. If they are dead, your assets will go to any of your other living relatives. If none of these relatives can be found, all your wealth will go to the Crown.
If the above has convinced you to make a will, follow these pointers when drawing up your will.
1 Decide who your assets are passed onto
Due to the intestacy rules outlined above, you won’t be able to decide who benefits from your will. If you have stepchildren or family friends that you would like to leave something behind for, draw up a will so that you can ensure this.
2 Prevent disputes among your family members
You can make certain instructions in your will so that no one in your family can dispute your will.
3 You can leave something behind to charities
If you frequently donate money to charities and would like to leave money behind to a charity of your choice, you can leave a note in your will stating this. Also, if you donate 10% or more of your estate, it reduces any Inheritance Tax to 36% instead of the usual 40%.
4 Avoid Inheritance Tax
Inheritance tax is payable on estates worth more than £325K. Only married couples or registered civil partners can avoid paying inheritance tax if their will gives everything to their spouse. The £325K that has not been used is then rolled over to be used if the surviving spouse were to die. If that spouse dies, they have the benefit of £650K being exempt from tax.
5 Be prepared in case your spouse dies at the same time as you
Life is filled with the unexpected, so if you and your spouse die at the same time, your family may have no idea what your wishes were, so they won’t be able to honour them. Therefore, having a will ensures that your wishes are written in black and white and that your loved ones benefit in the way you want them to.
6 Draw up a lasting power of attorney
A lasting power of attorney is a separate document and it is not mentioned within your will. Therefore, in addition to drawing up a will, consider having a lasting power of attorney prepared. This gives you the opportunity to appoint someone (called the “attorney”) who will manage your property and financial affairs, or your health and welfare if you lose mental capacity to make your own decisions.
7 Appoint an administrator
The person you choose to handle your will and make sure that everything goes according to your plan is called the “executor”. Make sure you appoint someone who will be able to fulfill this role. You can have more than one person, if you like.
It’s not too late, or too early to write a will. The sooner you do it the better – and the more certain you will be that the ones you care about are looked after.
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