For many people this time of year is an opportunity both to reflect on the year just gone and make plans for the one ahead. Life is busy for all of us and making sure personal affairs are in order can slip down the list of priorities.
If you are in the 60% of the UK population who have not yet made a Will* then the new year is an ideal opportunity to ensure that you have made guardianship arrangements for any children under age 18, and to make sure that your assets pass as you wish. Even if you have made a Will it is important to keep it under regular review to ensure both that it reflects your current wishes and that it is as tax efficient as possible.
Key things to consider when making a Will are:
- Executors: who would you like to deal with your estate? They gather in your assets, pay any liabilities and tax, distribute what is left, so they incur a high degree of personal responsibility. Executors also usually become trustees of any trusts created by the Will, for example if young children inherit.
- Guardians: if you have children under the age of 18, who would you want to look after them if you died? If anyone who has parental responsibility survives you, then they would have the right to look after the children, but your appointment of guardians would be revived if that person also died. It is also possible to make a separate statement appointing guardians outside of your Will.
- Gifts of cash or items: would you like to leave money or a particular item to a grandchild, or friend or charity? If so then this can be included in your Will, but if you wish to change the amount, item or beneficiary then you would need to make a Codicil (a document amending a Will) for those changes to be legally binding. It can be a nice gesture to leave something specific for grandchildren or other family members to remember you by, so it is worth considering this when making your Will.
- Personal possessions: it is helpful for these (furniture, artwork, jewellery etc.) to be given to your executors to distribute in accordance with any wishes that you leave. These wishes can be expressed in a letter and updated whenever you wish without needing to update your Will formally (unlike with gifts of cash). This maximises the flexibility of your Will and avoids additional fees for making Codicils. However, if you have any particularly valuable items or very strong views about who should receive them then it may be better to include them as specific gifts within your Will.
- Your residuary estate: you need to think carefully about who should receive everything else that you own once liabilities, legacies and specific gifts have been taken out. Often this is a spouse or children, but some people benefit charities or friends. However, if you do plan to leave a relative out of your Will (particularly if you have been supporting them financially) then it is especially important to take legal advice both to ensure everything is done to minimise the risk of a challenge to your Will and to ensure that proper evidence is available in the event that such a challenge is brought.
It is important to obtain accurate and bespoke inheritance tax advice when making your Will. There are different allowances which can be claimed if you are married or in a civil partnership, if you die owning property which you leave to your children, or if you have business or agricultural property. There are also ways to reduce inheritance tax through charitable giving in your Will.
At Hewitsons we have a large team of solicitors who are experienced in the full range of private client work, including Wills, who can advise you on making a Will which reflects your wishes in the most tax efficient way. There are lots of variables and it is important to seek experienced advice on your particular circumstances. If you would like to discuss making a Will please contact one of our Solicitors below.
Jennifer Koch (Cambridge) on 01223 532737 or click here to email Jennifer.
Carolyn Bagley (Milton Keynes) on 01908 247015 or click here to email Carolyn.
Francesca Rossi (London) on 020 7400 5037 or click here to email Francesca.
Rachel Hawkins (Northampton) on 01064 463165 or click here to email Rachel.