Writing a will is the foundation of estate planning. It is the beginning of taking charge of what happens with your wealth after your death.
Many people incorrectly assume that you should only write a will when you get to a certain age. Instead, you should write a will if you have children or a partner to ensure they are taken care of after your death. If you have assets, you should write a will to ensure they are distributed as you intend.
A will is a legal document that sets out your wishes after death. Once inheritance tax has been claimed from your estate, your remaining assets will be split as per the specifications of your will. You can bequeath any amounts of your assets to whomever you like in your will.
If the following circumstances apply to you, then you need to write a will:
If you have people who depend on you for care, you need to write a will to ensure they are taken care of after your death. This may include naming a guardian and setting up a trust for their future or for their care. Of course, you should speak to potential guardians to find out if they are willing to be named as guardians. You should also strongly consider life insurance if you have dependents. This will give them a payout after your death that can be used for their care.
While a spouse is usually well-protected if there is no will, having your wishes laid out will prevent any disputes after your death. Your will should specify what happens with your share of jointly owned assets like a house or retirement funds. You cannot assume that this will automatically go into their name. The last thing you want is for your grieving spouse to have to sell your house because your family received a share of your home. If you are not married or in a registered civil union with your partner, then a will is extremely important. They will not have automatic rights to your estate, so if you plan to leave them anything, you need to include it in a will.
Once you start accumulating assets such as property, shares and bonds, retirement funds, and large amounts of cash, you need to create a will. You will have no control over how these assets will be split after your death and will not be able to make your estate tax-efficient.
If you want to bequeath money to charity upon your death, then you need to have a will. You cannot rely on your family and friends to honour your wishes after your death, no matter how much you trust them. Creating a will is the only way you can guarantee your wishes will be followed.
If you have family members that you do not want to give money to, then you need a will. The closer this family member is to you in terms of relation, the more important this is. For example, if you are estranged from a parent and have no spouse or dependents, they may be seen as your next of kin and have legal claims to your wealth after your death. Even if you told everyone that you want your brother to be your sole beneficiary, without written proof in the form of a will, your parents would receive an inheritance.
You may have friends who are as close to you as family. If you wish to leave something to close friends, then you need to write a will. They will not have a claim on your estate otherwise.
Even if there is a will, it can be contested, so it is important to be very clear in your will and ensure you’re your attorney or executor has a copy of your current will. If you don’t have a will, you risk putting your loved ones through months or years of legal battles as people contest their share with other family members. Having a will helps to avoid many of the legal battles in the first place.
If you die without a will, then your assets will be divided as per intestacy law. This will take into account the familial relationship between you and any beneficiaries, not circumstances or relationship. If you are married or in a civil partnership, most of your estate will go to your spouse or partner and any children. Intestacy laws provide for both biological and adoptive children, but not step-children. If you are unmarried, most of your estate will go to your parents. If you are unmarried and have no living relatives, then the crown will receive your estate.
You should update your will after every change of circumstance. Certain actions like marriage will automatically invalidate your current will or mean that new family members are not provided for. In the UK, divorce will not invalidate a will, so if you do not want to leave your ex money, you should update your will. In general, you should check your will every 2-5 years to ensure you are still happy with its contents.
However, you need to update your will after the following life events:
If your will is invalid, then intestacy laws may apply, regardless of your previous wishes. It is important to keep your will up to date with every change in circumstances to ensure that no one will claim that your will is invalid to try and increase their share.
Before you sit down to write your will, you need to prepare a list of what will be in it and your named beneficiaries. This will help you to create a clear will that will be difficult to contest.
Prepare the following things:
The law sets out some basic requirements for a will in the UK. If any of these are not adhered to, then the will is invalid.
Writing a will does not have to be difficult. You can purchase a template in stationary shops for as little as £10. This is only appropriate for people with simple estates, which consist of their family home, retirement accounts, and some cash.
If you have a complex estate with many assets and many beneficiaries, then it might be best to seek professional assistance to manage your posthumous wealth. You could seek assistance from a legal advisor or a financial advisor.
You need to choose an executor for your will, who will carry out your wishes and make the bequeathments. They will handle the finances of your estate, such as the inheritance tax too. Your executor must know where to find the original copy of your will and any passwords that may be required to access it. If your will is contested, the original copy of the will must be presented for legal scrutiny. Most people will make two copies of their will to leave with their executor and their solicitor in case the original will is destroyed.
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