A shocking 54 per cent of people in the UK have not written a will, and many neglect to amend their existing wills when assets change. To protect your assets and prepare for the worst, it’s essential to have an up-to-date will in place. If you fail to make a will, the law will decide what happens with your money, property and possessions when you die.
This step-by-step guide will help you through the process from start to finish.
1. Choose your beneficiaries
The first task on your list when writing your will should be to decide on your beneficiaries. These can be people or organisations that will receive assets when you die.
You do not need to work out exactly what you’d like to leave to each beneficiary at this stage.
2. List your assets
The next step is to identify all of your assets. Start with easily defined assets, such as such as savings, jewellery and other valuable heirlooms. Don’t forget to include sentimental assets that you’d like to leave to specific people.
Once these are accounted for, you need to list the most complex assets in your estate. This includes aspects like your property, pension, businesses and investments. You may need professional advice when listing these as they are not easy to value accurately.
3. Decide which beneficiaries get which assets
You should now have two lists: one of your beneficiaries and one of your assets. Next, you need to decide how your assets will be divided between your beneficiaries. Here are some of the main types of bequests you can include in your will:
Pecuniary bequests – This is a gift of a specific amount of money (for example, you might leave £500 to your grandchild).
Specific bequests – This leaves a specific gift or asset to a beneficiary (for example, you might leave your jewellery to your daughter).
Residuary bequests – This gifts a portion of your estate’s worth to a beneficiary after gifts, debts and other costs (for example, you might leave 50 per cent of your estate to your nephew).
Reversionary bequests – This type of request allows you to specify who an asset goes to if your beneficiary passes away (for example, you might leave your property to your wife but if she passes away before you, it will go to your son).
4. Decide who will look after dependants
If you have dependants under the age of 18, you must choose who will look after them if you pass away. If another parent or guardian survives you and the dependants are also theirs, this part of the will is not needed.
However, if you are the sole caregiver or in the event of the death of all guardians, a designated person will take over their care.
5. Appoint an executor
Executors are the individuals who will carry out the wishes in your will. It is most common to appoint two executors (in the event that one is unable) but you can choose up to four.
It’s important that appointed executors are willing to perform the role because they are able to refuse when the time comes.
Common choices of executor include relatives, friends, solicitors, accountants and banks.
6. Find out if you’ll pay inheritance tax
You do not have to pay inheritance tax if:
- Your estate is worth less than £325,000
- You leave anything that exceeds the threshold to your spouse or civil partner
- You leave anything that exceeds the threshold to an exempt beneficiary, e.g. a charity
Seek professional advice if your estate does not fit into these categories.
7. Protect vulnerable beneficiaries
You may wish to establish safeguards for any vulnerable beneficiaries. This might include children or adults who are not able to look after themselves.
For example, you can establish trusts managed by people who will act in the beneficiary’s best interest. You can choose whether these safeguards are in place indefinitely or until the beneficiary can take care of themselves.
8. Write your will
One you’ve completed all of the steps above, it’s time to write your will. You can write the will yourself, use a solicitor or use a will writing service.
When written, you must sign your will in the presence of two witnesses aged over 18. They must also sign the will in your presence.
- Store your will safely
You can keep your will safely at home, or store it with your solicitor, bank, a will storage company or with the Probate Service.
Don’t forget to tell your executors where your will is kept.
- Update your will
It is recommended that your review your will every five years, as well as after any major change in your circumstances.
This includes:
- Divorce or separation
- Marriage (this cancels any previous will)
- Having a child
- Moving house
- If the will executor dies
- Making changes to your will
You cannot amend your will after it’s been signed and witnessed. If you wish to alter your will, you must sign a codicil and have it witnessed.
For further advice on preparing your finances for the event of illness and death, get in touch with the Choice team today.