What to know before making a Will in the UK
While it may not seem so difficult at first, writing a will can be incredibly complicated.
It’s more than just a case of who-gets-what, and there are a number of things to consider when making a will:
Who will manage the distribution of your estate to the beneficiaries?
Will any of your assets be written into a trust?
Is your estate subject to Inheritance Tax?
There are a number of steps you can take before writing a will to ensure that your wishes are carried out when you pass away, so this guide will talk you through exactly what to put in a will and explain how you can write one.
What to consider when making a Will
Before putting pen to paper (or writing a will online), there are a number of factors that you’ll need to account for when writing your last will and testament.
These include:
The value of your estate – Your estate comprises of everything that you own, and when writing a will, you’ll need to know (or at least have a good idea of) how much its total value is.
Inheritance Tax – Depending on the value of your estate, you may have to account for IHT before deciding on who will inherit your wealth.
Your beneficiaries – You’ll need to clearly outline who you wish to pass on your estate to when you pass away.
Your executor – This is the person who will have to deal with the distribution of your estate, including taking care of any remaining debts or taxes.
Any trustees/guardians – If you’re leaving young children behind, you may want to have a say on who will care for them and their inheritance.
Value your estate
Your estate is made up of all of your assets and needs to be valued to determine its net worth.
Significant assets included within the value of your estate may include owned property, vehicles, savings, investments and any cherished or sentimental items.
Once you’ve compiled all of your assets and determined the net worth of your estate, you’ll be able to distinguish how you’d like to split it up between your loved ones. Before that, though, you may need to start planning for the impact of Inheritance Tax.
Inheritance Tax planning
If you’ve established that your estate is valued at more than £325,000 then it is likely to be subject to Inheritance Tax.
An Inheritance Tax rate of 40% is charged on the value of an estate that exceeds the £325,000 threshold. For example, an estate valued at £350,000 would be subject to an Inheritance Tax bill of £10,000 (40% of £25,000).
There are a number of ways in which you can plan ahead to reduce the impact of IHT, all of which are clearly outlined in our Inheritance Tax planning guide.
Choosing your beneficiaries
One of the most important aspects of will-writing is naming beneficiaries.
A beneficiary is somebody who will benefit from your will when you die, usually by inheriting a sum of money or other assets like property or vehicles.
The vast majority of people leave their estate to be shared amongst children and a spouse or civil partner; however, there are some circumstances in which your wishes might be significantly more complicated than this.
Who you name as a beneficiary in your will is entirely up to you and is not a decision that should be taken lightly. To learn more about naming beneficiaries, read our guide on leaving gifts in your will.
Appointing the executor of a will
The executor of a will is the person who is placed in charge of completing the process of probate, and managing and distributing your estate in the event of your death.
This person is directly responsible for ensuring that there are no outstanding debts against the estate (such as mortgages, loans or credit card bills) before distributing the remaining assets as per the instructions stated in your will.
When choosing an executor, it is often best to appoint somebody who is likely to have your best interests at heart. To avoid conflict within your family during a difficult period, you may decide to appoint an impartial professional executor.
Appointing trustees and guardians
If you have any children aged under 18, the law surrounding inheritance states that they are not able to be named as a direct beneficiary.
To get around this, many parents decide to put their children’s inheritance in a trust, with specific instructions allowing the child to benefit from their inheritance when they reach a specified age. This trust must be put in the name of a responsible adult, known as the ‘trustee’.
One of the benefits of writing assets into trust is that they will no longer be included as part of your estate, meaning the taxable value of your estate will fall.
In the scenario where a child is left without either a mother or father, this responsibility is usually given to the same person who has been appointed the child’s guardian within a guardianship order.
A guardianship order gives somebody else parental responsibility for your child, ensuring that their wellbeing is always catered for.
How to write a will with Quick Wills
If you’ve decided that you would like to write a will, we recommend that you use a professional will-writing service like Quick Wills to ensure that your wishes are not deemed invalid when you pass away.
Our quick and easy service allows you to write a will online, and if you experience any problems along the way, our experienced legal experts are available to answer any queries you may have via our short contact form below.