Making a Will

Each December, we revisit some forgotten articles - posts that were written months or even years ago, but never published. This is one of those posts.

Today’s post looks at how to go about making a will, and why everybody needs to do it.

Making a will

More than half of UK adults don’t have a will.

• Two-thirds of people in their 40s haven’t made a will, and nor have 60% of those in their fifties (myself included).
• Even 54% of parents with children under 18 don’t have one.

There are two main reasons why people don’t make a will:

1. They don’t think that they need to (they have too few assets).
2. They are put off by the expense, and the time and effort needed to put their affairs in order in the first place.

I suspect that there is also a subconscious feeling that accepting your mortality (and planning for your death) is in some way hastening it.

It’s true that your will (or lack of one) won’t affect you directly.

• But it will affect the people that you love.

So pretty much anyone who cares what happens to their assets after they die needs to make a will.

• And anyone who is serious about their finances will already have the information that they need in order to make one.

Why?

Let’s look at a few reasons why you should make a will:

1. It will make sure that your money goes to the people that you want it to.
   • If you die without a will (intestate) then there are laws that say who gets your money.
   • For example, since my parents are dead and I am not married, my money would pass to my siblings (in my case, a sister).
2. You can make sure that you don’t pay more inheritance tax than you need to.
   • The first £325K of your estate is exempt.
   • You can also pass another £125K from property to your children.
   • And assets like AIM stocks, businesses, VCTs and EIS can be exempt.
   • And spouses can inherit tax-free.

What’s in a will?

A will needs to be in writing, and will cover six main areas:

1. What are your assets
2. Who gets what
3. What happens to your children (if you have any, and they are under 18)
   • You should also consider what happens to family pets.
4. Who will sort out your estate (your executor – this person is called an administrator if you die without a will)
   • You might want to choose two executors in case one dies before you.
   • You should also think about how to get details of your internet accounts and passwords to your executor (not directly in the will).
5. What should happen if the people who you intended to benefit have died before you.
6. You might also want to include specific plans for your funeral.

You don’t need a lawyer to make a will for you, you can do it yourself.

• But it does need to be signed in front of two witnesses who are over 18 and who won’t benefit from it (neither can their spouses).
• The two witnesses also need to sign it.

For the will to be legal, you need to be:

• over 18 and of sound mind
• making the will voluntarily

You should date the will, but this is not a legal requirement.

Being an executor

While we’re on the subject, think twice if someone asks you to be the executor of their will.

On paper, the duties are simple:

1. Find the assets
2. Value them
3. Pay any tax due
4. Distribute what’s left

There are two things to note:

1. It’s a lot of work
   • I was administrator of my father’s estate and I had to write hundreds of letters over many months.
2. You have legal and financial liabilities (for tax, bequests and debts).
   • This liability extends for 12 years, or 15 years if minors are involved.

The alternative is to appoint a professional executor (a bank or solicitor) to help.

• Note however that they might want a fee of 1% to 3% of the estate, which is entirely out of proportion to the work involved (shades of London estate agents here).

And even then, the original lay executor remains liable.

Complications

Most online resources list complications that mean that you should get a lawyer involved – here are the most common ones:

1. There is likely to be a fight between family members over your assets (having more than one marriage is a good cause of this).
2. You have overseas property, or a business.
3. You share property with someone who is not your spouse / civil partner.
4. You have a beneficiary in mind who can’t take care of themselves.

Updates

You need to update your will if:

1. You get married, separated or divorced
2. You have a child
3. You move house
4. Your executor dies

You can add codicils (alterations) to an existing will.

• This will be cheaper than writing a new will.
• Witnesses are required, but they don’t need to be the same people who witnessed the original will.

Or you can create a new will which explicitly revokes previous wills.

• The general advice is then to tear up or burn your old will, so that there’s no confusion about which will is valid.
• This destruction should be done in your presence.

Storage

It’s okay to keep your will at home, though you will need to tell your executor (or another relative or friend) where to find it.

• If you don’t feel comfortable with that, most people have traditionally used their bank or a lawyer.

There are also dedicated will storage firms, and you can lodge your will with the Probate Office in Holborn.

• This costs £20.

Free wills month

Once or twice a year – March and October seem to be the current months – charities like Age UK sponsor Free Wills Month.

• This allows people over 55 to get a will for free from participating solicitors.
• The idea is that in return you leave a bequest to one of the charities in your will.

If your will is very complicated, the solicitor may ask for a top-up fee.

• I’m told that the appointments fill up quickly.

I haven’t been able to take advantage until recently as my other half has only just turned 55, but it’s an approach that I’m considering.

There is a similar scheme called Will Aid which runs every November.

• The suggested donation here is £135 for a pair of mirror wills.

So that’s three months each year when the over-55s can get a “free” will.

• And some charities run their own schemes that are open all year round.

How to do it

Apart from Free Wills Month / Will Aid, there are three ways to create a will:

1. Pay a solicitor (at least £500 for a pair of mirror wills)
2. Use a DIY kit (£60 upwards)
3. Use an online service (£60 upwards until recently, but now there is a free service).

I’ll be back in a few weeks to check out all these options.

Until next time.