It is important for you to make plans for the division of your estate when you die. A will is a way to ensure your loved ones are taken care of and although it is deemed to be expensive and complicated, it is well worth considering.
Ten of The Benefits of Having a Will.
1. Select Your Beneficiaries
If you don’t create a will, your estate is subject to a complex set of intestacy laws which vary depending on where you live in the UK. If this happens, the people you want to benefit from your estate may end up missing out. When you create a will however, you get to divide up your estate on your own terms. This guarantees that your partner, children or immediate family receive the assets you believe they are entitled to upon your death.
2. Nominate Guardians
If you have children and they are under the age of 18 when you die, you have the authority to choose who you want to be their guardians. This is an excellent way of ensuring your children end up with someone who loves them and can bring them up in the manner you hope.
3. Keeping Money In Trust
If your children are under the age of 18 when you die, they may not receive as much money as you would like if you don’t make a will. When you hire a qualified solicitor to draw up a will on your behalf, you can ensure the money in your estate is held in managed trusts. The end result is the maintenance of income and long-term benefits for your children while also avoiding the high costs of legal administration.
4. Allows For Charitable Donations
When you make a will, it is possible to choose charities and make substantial contributions to them. A significant number of people have the desire to donate a large sum of money to a cause close to the heart in order to make a meaningful difference but fail to create a will to outline their wishes. As a result, allowances for charitable donations are never legally recorded and you never get the opportunity to give something back.
5. Reduce Inheritance Tax
Inheritance tax can be a real financial burden if you don’t make a will. When you die, the UK Government decides how much your estate is actually worth and then deducts your debts in order to leave the value. At the time of writing, your estate will owe 40% tax on anything above £325,000 though this is reduced to 36% if you leave at least 10% of your estate to a charity. In other words, if your estate is worth £825,000, your beneficiaries will be hit with an inheritance tax bill of £200,000.
If you have a will created however, it is possible to reduce this tax bill in a number of ways. While money given away before you die is deemed to be part of your estate, it becomes exempt if you don’t die within 7 years of giving the gift. If you make large lifetime gifts, it is possible for your beneficiaries to take out life insurance against the possible inheritance tax bill although you would need specialist advice to see exactly how this works. In any case, none of the above is possible without creating a will.
6. You Can Choose An Executor You Trust
The executor of your estate is the individual responsible for ensuring your wishes are carried out after you die. In most cases, it is best to choose a close friend or relative who is strong willed and not easily intimidated. While you could also choose a bank or solicitor as executor if no one else is suitable, their services come with large fees. The writer of your will may try and pressure you into naming them as executor but you have no legal obligation to do so.
7. Deal With Awkward Funeral Arrangements In Advance
No one likes discussing death but it is an unfortunate inevitability. If you have a will, you can choose to be buried in a certain cemetery or else you may wish to be cremated and have your ashes sprinkled on a local river for example. Alternatively, you could specify the person who should be in charge of the funeral arrangements. Without a will, none of the above is likely and this could lead to arguments and tension between family members.
8. Preparation For Disability
If your mental or physical health deteriorates, you may no longer be in a position to manage your financial affairs. If this happens and you have no will in place, you may end up in a care home or in another situation you don’t want to be in. When you have a will drawn up while you are still of sound mind and body, your executor has no choice but to adhere to your wishes.
9. Consider Children From Past Relationships & Make Adjustments
If you have children from previous marriages or relationships, you can use a will as a means of providing them with financial assistance if you choose. You can also alter your will depending on changing life circumstances; for example, if an ex-spouse gets remarried.
10. Consideration of Probate
When it comes to property distribution, you need to have a will which clearly defines distribution or else the probate courts could get involved. This is a costly and time consuming affair which will cause great stress and heartache for your loved ones.
It is estimated that over 65% of UK adults don’t have a will. Even more worrying is the fact that 90% of people under the age of 35 don’t have a will and in many cases, this is simply a case of ‘not getting around to it’ as opposed to not having a desire to write one. If you have property or any other types of assets, it is never too early to have a will drawn up so get in touch with us today.