Taking control: why it’s so important to make a Will

Most people would rather go on holiday than make a Will, but making sure you have done that is arguably one of the most important things you can do for yourself and your family, to protect your partner, your children, and your assets.

If you die without a Will your estate will automatically go to your spouse, children or next closest living relative, in shares determined by the intestacy rules. There’s no guarantee that your wishes will be carried out after your death and your home may have to be sold, to be distributed among the family.

Couples who are not married or in a civil partnership have no right to inherit under the intestacy rules. Your partner could lose their home unless you own it jointly, and will inherit nothing from your estate.

Making a Will also gives you the opportunity to nominate a guardian to look after any children under the age of 18. If you do not do that, the courts will make a decision for you. They might not choose the person you’d prefer, and the process can be very stressful for everyone involved, especially your children.

And last but not least, while no-one likes to think of their nearest and dearest falling out after their death, it does happen. A Will lets you state exactly who gets what and helps to avoid disputes.

Use your Will to:

Take control.
Appoint people you trust as executors, to carry out the terms of your Will.
Appoint guardians to look after any children under the age of 18.
Make sure you don’t unintentionally leave someone without a home.
Leave gifts of specific items or money to the people or charities you want to benefit.
Provide financial support for a particular beneficiary (your surviving spouse, for example) while ensuring that your assets will eventually pass to other individuals (such as your children).
Create trusts to protect your home from the impact of care fees, look after future generations, or help vulnerable or disabled beneficiaries.
Minimise inheritance tax and create long term tax saving opportunities.
Specify your funeral wishes.
Avoid conflict in your family.

Wills and Will Trusts

A very simple Will might provide for the entirety of your estate to pass to a particular beneficiary after your death. But where will that leave the beneficiary? Will you be giving them an inheritance tax problem? Will someone’s entitlement to means tested benefits come to an end?

If your assets pass to your children or grandchildren are they too young to manage their inheritance themselves? What if your children get divorced?

If the beneficiary is your spouse, what would happen if they needed long term care? Would there be anything left for the children? What if your spouse or partner were to remarry?

If any of these resonate with you it might be appropriate to create a trust in your Will that comes into existence on your death. Trusts first developed during the crusades when knights who left this country for the Holy Land discovered they needed someone back here to keep a watchful eye over their families and their land. So think of a trust as your castle that shelters your family and your assets and your trustees as the knight standing guard at the door. Trusts can provide valuable tax saving opportunities and protection for your family and it is worth getting specialist advice about what type of trust may suit your circumstances.

Lifetime Trusts

You can also set up a trust in your lifetime that takes effect immediately. You can be one of the trustees, one of the knights at the door, so you can have the advantages of inheritance tax planning and family protection while still retaining control of your assets.

A wide range of assets can be transferred into trust, such as cash, property or shares. It is usual to limit the value to £325,000 to avoid having to pay inheritance tax at the outset. After seven years the value of those assets will not be included in the calculation of any inheritance tax that is due, so a potential saving of £130,000.

If you have life insurance in place it is worth asking yourself whether that should be written into trust for the same reasons – inheritance tax planning and family protection.

Lasting Powers of Attorney

By making Lasting Powers of Attorney (LPAs) you ensure that the people who you would like to help you if ever you need help with either your property and financial affairs or your health and welfare are able to do so. Make sure LPAs are in place for you and for older family members who do not already have them.

Dealing with ill health or incapacity or loss of a loved one is hard enough. Making sure you have Wills and LPAs in place can save it from being harder still.

If you would like to discuss any aspect of planning Wills, Trusts and Lasting Powers of Attorney, contact Virginia Harvey at Shakespeare Martineau Virginia.harvey@shma.co.uk; tel 0115 9453734.

The Financial Conduct Authority does not regulate Wills and Trust advice