Making a Will ensures your assets are distributed in the way you intend after your death, with people you have chosen dealing with your estate and looking after your children. Without a Will, the law controls all these things and that may not be in line with your wishes. By making a Will:
You choose your executors. These are the people who will be responsible for administering your estate: gathering in your assets, protecting their value, paying any liabilities, accounting for inheritance tax and, ultimately, distributing the net assets to your chosen beneficiaries. When you make a Will, you can choose people you trust to do this. Selecting people with the right qualifications and skills to deal with specific assets or situations can help protect the value of your estate, ensure everything is dealt with efficiently and avoid disputes.
You choose who will look after your children. By appointing guardians under your Will, you decide who will be responsible for your children if they are under 18, ensuring they will be cared for by someone you trust. If no guardians are appointed, a court will have to decide who takes responsibility for children and there is a risk of them being taken into care by the local authority in the meantime.
You choose who benefits from your estate and how. You may be surprised how the English intestacy rules operate if you do not have a Will: a portion of your estate is left to any surviving spouse (even if you are separated), there is no automatic right for an unmarried partner to benefit (even if you have been living together for many years), a fixed portion of the estate passes to your children (not including stepchildren, unless you have legally adopted them), which they will be entitled to outright at the age of 18. If you leave no spouse or descendants, the estate is divided between your surviving relatives in a fixed order: parents inherit if they survive you, failing which siblings, or their children, failing which grandparents, then aunts and uncles, or their children, etc. These rules rarely reflect what people want to happen. By making a Will, you can choose who inherits what and when, for example, delaying the age at which children receive large sums of capital outright (so they don’t get it all at 18), leaving gifts to charity or to other people of your choosing.
You control how your assets are dealt with. You may be content for everything simply to be sold and divided between the beneficiaries. However, if you have assets that are unusual or need to be treated differently, you can leave specific instructions under your Will. For example, you may wish a collection of art to be preserved or donated to charity, or for a business to remain in the family or be run by someone of your choosing.
You can leave your assets in a tax efficient way. Inheritance tax is generally charged at 40% in the UK, but you can structure your Will to make use of exemptions (available on assets passing to a surviving spouse or to charity) and reliefs (available for agricultural, business and heritage assets). You can also plan how tax will be paid to ensure that your beneficiaries receive the assets you want them to have.
For more information or to discuss any of these points, please contact Rachel Mainwaring-Taylor.