Making a will is one of the best things you can do to ensure your family are taken care of when you die and that your money, property and other belongings are passed on to the people or good causes you have chosen.
To make a valid will there are certain requirements that need to be met. Wills must also be structured in a certain way if you wish to limit the amount of inheritance tax that needs to be paid.
To ensure your will is valid and as tax efficient as possible it is important to use a solicitor to help you to prepare it, as Wendy Mustard, Solicitor & Head of wills and probate with Richard Reed Solicitors explains.
Validity of a will
There are strict rules about the way a will must be written and how your signature must be witnessed. Failing to comply with these requirements could mean that your will is invalid, which could cause serious problems for your loved ones if they face losing out on their inheritance as a result.
When you die without a valid will, what happens to your assets will be determined by a set of rules known as the Intestacy Rules. Under these only certain close relatives can inherit from your estate and there is a strict order of priority that must be followed.
One of the big problems with the Intestacy Rules is that they make no provision for unmarried couples to inherit anything when their partner dies, which means that, unless any property or bank accounts you have are in joint names, there is a chance you may receive nothing. The Intestacy Rules also make no automatic provision for step-children or for any charities you may wish to benefit.
A specialist Solicitor will make sure that all necessary formalities are complied with.
Challenging a will
If you have been diagnosed with a progressive mental illness, such as Alzheimer’s, it may be possible for your will to be challenged if there is doubt about whether you knew what you were doing at the time your will was made.
It may also be possible to challenge your will if there is any suggestion that you may have been pressurised into making it, for example by a relative keen to maximise how much they receive or by a carer who has taken advantage of you.
A Solicitor can help you obtain medical evidence from your doctor to confirm your mental health at the time the will was made to reduce the likelihood of your mental capacity at the time being questioned.
A Solicitor will also work closely with you to ensure that the terms of your will accurately reflect your wishes rather than those of someone else who may be trying to influence you.
Explaining your intentions
Sometimes the provisions of your will may come as a surprise, or even a disappointment, to your family and friends. To help them understand why you may have excluded them from your will or left them less than they may have been expecting, your Solicitor can draft a letter of wishes to accompany your will explaining why certain decisions have been made.
This can sometimes help disappointed relatives accept what has happened. It can also make people think twice about making a claim against your estate under the Inheritance (Provision for Family and Dependants) Act. Under the Act certain categories of people, including anyone who was financially dependent on you at the time of your death, can make a claim for a share of your assets if they believe that you should have made some provision for them or more provision than you have allowed.
A letter of wishes can also provide you with an opportunity to explain what sort of funeral you would like and anything else you would like to be considered when decisions are made after you have died.
If you die leaving assets worth more than the current inheritance tax threshold then you face the prospect of 40 per cent of your assets being swallowed up in tax. To put this in context, the current inheritance tax threshold is £325,000, so if you die with assets worth £500,000 you could potentially face having to give £70,000 to HMRC.
Through the careful structuring of your will it may be possible to take advantage of a range of legitimate reliefs and exemptions to get this tax bill down. A Solicitor will be able to explain your options and ensure any necessary structures are properly implemented.