With some topics difficult to talk about, CityX has launched its Taboo Topics feature, aiming to discuss things that may not always come up in conversation, but are important to discuss.
Every year in May (this year, May 13-19), Dying Matters host a Dying Matters Awareness Week, which reminds us all of the importance of thinking about the sensitive subjects of dying, death and bereavement.
Dying and bereavement are subjects that many people find difficult to discuss, or even think about. However, did you know that every year, around 1 in 3 people die without making a will.
It may not be something openly talked about, but making a Will is important, and can be difficult if you’re not prepared. When should I make my Will? What if I change my mind? Do I really need to make one? What if I have assets overseas?
With this in mind, CityX spoke to Emma Van-der-Sluis, Paralegal at Ringrose Law and Head of the Lincolnshire CiLEX Branch to discuss the unexpected aspects of making a Will, and the steps to take in making a Will:
Do I really need to make a Will?
“In short, yes. Where a person dies without making a will, their assets are shared out according to the rules of intestacy, and potentially not in the way the deceased would have wished.
“The intestacy rules make no provision for unmarried partners. Even if you are married, your spouse may not inherit as much as you wish without a valid will. If you are married but have separated, the intestacy rules provide that your spouse would still inherit. If you die without a spouse or children, then your estate will be divided among your surviving relatives in accordance with the rules, or where there are no surviving relatives, to the Crown.
“To avoid getting caught out, and ensure your wishes are followed, you should make a will.”
Who should I choose as my executors?
“It is always advisable to have more than one Executor appointed, in the event that they pass away before you or are simply not in a position to act when the time comes.
“Anyone over the age of 18 can be an Executor and it does not matter if they are also named as a beneficiary under your Will.
“As the role bears a lot of responsibility, your Executors should be people that you trust to carry out your wishes and that you are confident would be able to deal with any issues that may crop up.
“You can also choose professionals to act as your Executors, such as solicitors or accountants. When professionals act as Executors, then there is a charge for this service, which depends on the complexity of the matter. There can be many advantages to appointing professionals, as they can use the benefit of their experience to provide the correct advice and will be able to be impartial in the event of a problem.”
Do I need to appoint guardians?
“You can not only provide financially for your children in your Will, you can also appoint guardians, who could step in to care for any minor children if anything happened to you before they reach adulthood.
Will I need to pay Inheritance Tax?
“Each person has an inheritance tax allowance of £325,000 – known as the nil-rate band. The standard inheritance tax rate is 40% of anything in your estate over the £325,000 threshold.
“If you are married or in a civil partnership, and leave your assets to one another, there is usually no tax to pay on the first death, and you can use any unused allowance on the second death, so up to £650,000
“As of April 2017, you can also pay less inheritance tax if you’re leaving property to a direct descendant. For the 2019-2020 tax year, this new transferable allowance rose to £150,000, on top of the nil rate band.
“Inheritance Tax (IHT) is a complex area, and you should always take specialist advice, especially if you want to look at ways to reduce any IHT liability.”
My family situation is complicated. How can I ensure that everyone is provided for?
“You should always take legal advice. We can discuss your wishes and advise on different ways to ensure that your assets pass to those you wish to benefit.”
Do I need to provide details of all of my assets?
“If an accurate account of your finances are provided to a professional, they will be able to advise you fully on a range of subjects, such as how to protect your assets, whether you need advice from elsewhere, whether your estate might be liable for inheritance tax etc.”
Can I just give my assets away before I die?
“One of the easiest ways to avoid inheritance tax on your estate is to give away assets while you are still alive.
You can make gifts to family at any time, and provided you live longer than 7 years from the date of making the gift, there will be no inheritance tax to pay on the gift. There are however other considerations to take into account when making significant gifts, such as the ‘deprivation of assets’ rules.
“There are limits as to how much you can give away each year, and it is always recommended that you take legal advice if you are considering giving money or assets away so that advice can be provided on the possible pitfalls and other matters you should take into consideration.”
What if I have assets overseas?
“This can be a complex issue, and you should certainly take specialist legal advice if you have assets overseas, whether this be property, shares, timeshares, or other assets.”
Do I need a letter of wishes with my Will?
“Most people are aware of the importance of making a will, and that a correctly executed will is a legally binding document. A letter of wishes, which is a confidential document which can be written to accompany a will, is not legally binding. However, it can still be a very important document.
“Where family members have been left out of a will, or are to receive a smaller share of an estate than they may otherwise have expected, a letter of wishes can be a useful indicator of the reasoning behind the decision and the thought process at the time the will was made, and used by a Court if a claim were made on your estate.
“A letter of wishes can also help executors make practical decisions, such as funeral arrangements, or to set out who should receive items which are not of great monetary value, but their sentimental value means that they should pass to a preferred beneficiary or loved one.
“Detailing items such as these within a Will can make it lengthy or complicated. Additionally, if there is a change of heart about who is to receive a particular item, this can be done without having to alter the will. However, a letter of wishes is not legally binding, and so the executors are under no obligation to distribute the items in accordance with the letter, and the contents will simply be viewed as your wishes.”
What happens if I change my mind?
“You can change your Will at any time. If you have changed your mind, or have had a change in circumstances and want to discuss whether any changes are necessary, it is always advisable to discuss this with a professional who can advise you appropriately.”
How often should I review my Will?
“You should always look this over every few years, or if there has been any significant change to your circumstances, to check that it is still matches your current intentions.”
You should always review your Will in the following circumstances:
- You have married or entered into a civil partnership
- You have divorced or your civil partnership has been dissolved
- You have separated from your spouse or partner
- An executor or beneficiary has died
- You have new additions to the family who you would like to benefit
- Your assets have changed significantly
- You have simply changed your mind
For more advice, help and information contact the Wills & Probate specialist at Ringrose Law.