Wills - An Outline
The increasing complexity of modern family life has made Will planning more important than ever. Second marriages are common and estates are often larger than might be expected, mainly because of house price inflation. Even so, many people do not have adequate Wills.
Why Make a Will?
- The only certain way to ensure that your spouse, partner or relative etc inherits what you intend is by making a Will. If you die without having made a Will, the intestacy rules apply in an arbitrary manner, particularly if there are no children. This may lead to your spouse having to share your estate with relatives (eg. brothers and sisters, nieces and nephews) whom you may never have intended to benefit.
- 'Home-made' Wills can be disastrous: for example omitting to provide for the position if the main beneficiary does not survive; failing to take advantage of the tax savings; referring to assets which are not owned on death.
- You can provide for specific funeral arrangements (i.e. burial, cremation, or the use of your body for medical research).
- In the case of children under the age of 18, guardian's must be appointed on the unexpected death of both parents. Consideration may also need to be given to compensating the guardians for the cost of bringing up the children including the possibility of moving to a larger home.
- You must appoint Executors to deal with your estate in the event of your death and hold property on trust, for example, during a beneficiary's minority. These Executors have a very important role to play and should be either business-minded family or friends and/or professional advisers.
- By careful drafting, Inheritance Tax (IHT) can be saved on the estate that you leave behind. IHT considerations are important, particularly as the estate may easily exceed the current nil-rate band.
- The Inheritance (Provision for Family and Dependants) Act 1975 exists for the support of disappointed potential beneficiaries. Advice should be sought as to whether there exists someone who may be able to make a claim under this Act on your death. As family life becomes increasingly complicated, the potential for Inheritance Act claims increases and it should be remembered that the cost of defending such claims usually comes out of the deceased's estate.
Wills should be reviewed at least every five years between the ages of 35 and 65. Assets, dependants (older and younger) or spouses, may change significantly between those years. Failure to review may mean that a Will no longer reflects current wishes.