Making a Will is your chance to control what happens to your assets once you have passed away, so it makes sense to give your Will some careful thought.
Your solicitor can guide you through all the issues you need to consider when making a Will, but the following questions might be a helpful starting point:
1. What do I own?
Thinking about the assets you own, such as a property, cash, investments and personal items like jewellery, can be a useful starting point.
Assets which you own at the date of your death can pass in accordance with your Will, unless, for example, they are held as ‘joint tenants’ with other people. For example, if a couple own a house as joint tenants or have a joint bank account then if one of them dies the other person will automatically inherit the whole asset, regardless of the terms of the Will of the first person to die. If you do not wish this to happen then you can ‘sever’ your joint tenancy so that instead the asset is owned as ‘tenants in common’, meaning that each person owns a distinct half share which can pass under the terms of his or her Will.
Other assets which may not pass under your Will include pensions, life insurance, assets held in trust and certain business interests, and so it is important to consider these too when making your Will.
2. Who do I want to benefit from my Will?
In your Will you can leave items, property, amounts of money or a share of your estate to family, friends or charities of your choosing. They are known as your beneficiaries.
You can also decide when and how your beneficiaries will inherit. For example, if you have young children or other vulnerable beneficiaries who are unable to deal with large sums of money themselves you may wish to appoint trustees to manage the funds on their behalf, in a trust.
Trusts can also be useful if either you or your partner has children from a previous relationship, or you are concerned about your partner making a new Will after you have died leaving assets they have inherited from you to a new partner or children. For example, your Will could state that your partner could benefit from the trust fund during their lifetime (such as being able to live in a property and/or receive income from your investments) whilst the capital of the trust fund could ultimately pass to your children.
You should be aware that certain categories of people such as children, spouses, financial dependants and some ex-spouses and cohabitees might be able to challenge your Will if they feel that you have not made adequate provision for them. Your solicitor will be able to advise you on the risk of any potential claims, and the best way to word your Will to minimise the risk of a successful challenge.
3. Who will deal with things when I’m gone?
In your Will you can name executors to manage your affairs once you have died. They will ensure that any outstanding bills, debts and taxes are paid, and then distribute the rest of your estate as per your Will’s instructions.
You can name family members, friends or professionals such as solicitors and accountants as your executors provided they are aged over eighteen.
It’s a good idea to let anyone named an executor know that you have chosen them, so that it’s not a surprise when you die. Being an executor can be a difficult task, especially at what could be an emotional time for them.
4. Who will look after my children?
If you have children who are aged under eighteen, you should consider appointing guardians. A guardian will have custody of your child or children if you pass away without leaving anyone else who has parental responsibility for your child, and if one isn’t named, then the courts will appoint a guardian.
When choosing a guardian, consider their aptitude for childcare. Do they already have children? Are they in a position to look after more children, or look after your children? Do they already have a strong relationship with your children? In the same way as appointing an executor, it should be something you discuss thoroughly with the individuals you’re considering appointing.
5. Will I have to pay Inheritance Tax?
Your solicitor will be able to advise you on whether Inheritance Tax (IHT) will be payable on your estate, and whether you can structure your will so as to reduce or avoid it by making use of IHT exemptions and reliefs.