Preparing a Will
What is a Will?
A will is a legally binding document where you state your instructions for how your estate should be distributed when you pass away. They may also be used to appoint guardians to take care of your minor children, and executors to manage your estate on death.
What happens if I don’t make a Will?
If you die without a will in place the ‘rules of intestacy’ will apply. This will mean that your estate will be distributed according to a strict order depending on the value of your estate and which family members survive you. This may mean that your assets end up passing to people who you’d prefer not to inherit
If you are unmarried then your partner will not inherit anything from you without a will in place.
If you have minor children and there is no surviving parent then social services will decide where to place your children, as no guardian will have been appointed.
Who can make a Will?
To make a will you must be over 18 and have ‘testamentary capacity’. This is the mental capacity to understand and make a will. You must be able to understand:
1. The nature and effect of making a will
2. The size and nature of your estate (what you own)
3. Any moral claims that you ought to give effect to i.e. the claims that any family members may have on your estate.
You must also not be suffering from any mental disorder that effects your ability to make a will. We will be able to advise you on this.
Can I change my Will?
As long as you have testamentary capacity you are free to change or revoke your will as you please. We recommend that you review your will every 3-5 years or on certain life events such as marriage, divorce, birth of children, death of any beneficiary, or if your financial situation changes.
What are Mirror Wills?
Mirror wills are two separate wills usually made by a couple. These wills are reciprocal and usually appoint the same executors and make the same gifts – they ‘mirror’ each other. If you and your spouse make wills leaving everything to each other and then on to your children, these would be simple mirror wills.
Executors and Trustees
What is an Executor?
Executors are the people you choose to stand in your shoes and deal with your estate after you are gone. Broadly, their duties include locating all of your assets, paying your funeral expenses and any outstanding debts, and making sure your estate is distributed to the beneficiaries you have named in your will.
What is a Trustee?
A trustee’s role differs from an executor’s, even though it is common to appoint the same people in both roles. A trustee will manage any ongoing trusts that are created by your will, so they will take over responsibility for any assets left to trust once the executors have completed the administration.
How many Executors can I have?
You need a minimum of one. You can name as many as you like but only four can act at the same time. If you want to name more than four people, it’s often best to name the additional people as reserve executors instead.
Can my beneficiaries be my Executors and Trustees?
Yes, they can. It’s quite common to name the people who will be inheriting your estate as the people who will benefit from it.
Do I have to appoint a professional Executor?
No, you can appoint your family or friends as your executors or trustees as long as they are adults and have mental capacity. If your estate or your wishes are complicated, you may want to consider appointing a professional such as a solicitor or trust corporation to act though.
What is a Guardian?
Guardians are people who you appoint to take on the care of your minor should you pass away while your children are under 18. You can appoint guardians in your will, and we recommend you do so if you have minor children.
What should I consider when appointing Guardians?
Most people with minor children already have a good idea of who they’d want to care for their children if the worst happened. The main things to consider are your proposed guardians’ own situation and experience with children, their preparedness to act, your children’s relationship with them, their physical location – would the children need to relocate? It’s also important to consider how the children would be looked after financially.
Should my Guardians be Executors?
It is very common for the guardians to be executors. It normally follows that if you trust someone to take care of your children, then they should have some form of access to the assets of the estate to provide for your children. It should also be mentioned that there are some instances where the Guardian (e.g. a divorced parent) should not be allowed direct access to the assets but go through an alternative executor.
How can we deal with the family home?
First you will need to determine if you own your home as ‘joint tenants’ or ‘tenants in common’. If you hold your home as joint tenants, then when one of you passes away the property will automatically pass to the surviving owner, no matter what the will says.
If you own as tenants in common, then you can each deal with your share of the property separately and put planning in place to protect it. We will be able to help you find out how you hold the property and make the switch to tenants in common if necessary.
Can I plan for Inheritance Tax?
Yes. Inheritance Tax is known as a ‘voluntary tax’ as there are things you can do in lifetime to reduce how much tax you will pay, and also planning you can put in place in your will to make sure you make the most out of all available reliefs. Every individual has a nil rate band of £325,000 (2019/2020). This is the amount they can gift on death without any inheritance tax becoming payable. On top of this there is also a residence nil rate band of £175,000 (from 6 th April 2020) that can be used against your property if it is being gifted to your children or remoter descendants, such as grandchildren. Both allowances are also transferable between spouses. We will be able to advise you in detail about the tax your estate is likely to pay and what you can do to mitigate this.
Information courtesy of the Society of Will Writers