Making a will is often something that people avoid for as long as they can, particularly the young. However, recent research has shown that the pandemic triggered a rise in will-writing, with the younger generation seeing the biggest increases.
Ultimately, if you have any assets to leave, you should make a will, whatever your age. After the sobering events of the past 12 months, there should be no excuses not to, but here are some of the reasons why you should.
Leaving to loved ones
Drawing up a suitable will is the only way to ensure that your assets pass to your family, loved ones and any other chosen beneficiaries in the event of your death.
At a basic level, if you have spent your life helping to support your family and built up some assets along the way, then you should make a will.
Divorce and re-marriage mean that ‘blended families’ are now commonplace. A well-drafted will is the best way to deal with the complexities that blended families can bring when it comes to passing on your assets.
A legal adviser will know exactly what structure is required to ensure that everyone you want to leave something to is provided for. There is no individual situation that cannot be dealt with.
Minimising Inheritance Tax
A will plays a part in minimising the impact of Inheritance Tax on your estate when you die. It can set up the structures to allow your assets pass to the right people in the most tax efficient way possible.
Many people assume that Inheritance Tax (IHT) is a rich person’s tax, but growing prosperity amongst older generations, much of it underpinned by rising property prices, means that more people than ever are finding themselves in the IHT bracket. However, they often don’t realise this until it is too late to do anything about it.
There are many cheap will-making options available nowadays, ranging from free online facilities to budget packages from national retailers. While it can be tempting to do it yourself or cut costs with one of the cheaper options, you should carefully consider your requirements before taking this approach.
Only the advice of a legal professional can ensure that your particular circumstances are correctly accounted for. For example, properly structuring your will to minimise Inheritance Tax would not be possible with a DIY will-writing option.
Risks of not having a will
When someone dies without a valid will in place, they are treated as dying ‘intestate’. In this instance, their assets must be shared out according to certain specified rules.
Many people make the mistake of assuming that their assets will automatically pass on to the person they regard as their next of kin, but this is not always the case. Only married or civil partners and some other close relatives can inherit under the rules of intestacy.
Additionally, if someone makes a will but it is not legally valid, the rules of intestacy decide how the estate will be shared out, not the wishes expressed in the will.
Where intestacy does not provide adequately for the people financially dependent upon you it is possible for them to make a claim against your estate. This involves a Court application that can be lengthy and costly.
When you’re ready to make your will, the first step is to draw up a comprehensive list of all of your assets. This should include any properties you own, bank savings, lump sums payable on death such as insurance or pensions, stocks, shares and other investments, motor vehicles and belongings such as antiques and jewellery.
You also then need to consider who you want to leave your assets to and what you would like them to receive.
Then, work with a qualified solicitor or lawyer who can help you draw up a will taking into account your instructions for how you wish your assets to be passed on, along with tailoring it to your individual financial and tax-related circumstances.
For more guidance on making your will, please get in touch.