Kat Wainman and Sarah Wintle look at preparing Wills and things you should consider when putting one in place. Both Kat and Sarah are solicitors in our Tax, Trusts & Estates team.
In our team, we’ve had lots of enquiries about Wills due to the COVID-19 pandemic - some firms are reporting up to a 75% increase in enquiries since the start of March 2020. This doesn’t take into account the preparation of DIY Wills. Disputes can and do arise where a Will hasn’t been prepared, or a Will hasn’t been executed correctly. In such circumstances your estate may not pass to the people you wanted it to, and cause unnecessary stress and expense for your loved ones.
Why should I make a Will?
By writing down your wishes in a Will, you can ensure that your estate will be dealt with in the way you want after you die. Writing a Will enables you to:
- Provide for your spouse, children and other loved ones;
- Protect money from the younger generations until they reach an age where they can manage it responsibly;
- Plan effectively to minimise Inheritance tax and other taxes; and
- Nominate someone as your executor(s) to administer your estate.
What should I consider when making a Will?
The details of everyone’s estate will be different, but some of the key things to consider are as follows:
What property and assets do you own? Who are your chosen beneficiaries and what inheritance do you want them to receive? For instance, what would you want to happen to your estate if your widowed spouse re-married? Would you wish for an estranged spouse of a beneficiary to benefit from your estate? What age do the children receive any entitlement under the estate? Do family members receive an equal share of your estate? Is this ‘fair’ when taking into account financial circumstances, medical needs, previous gifts and family relationships? All of these questions need to be considered when drawing up a Will.
Who will be the executor(s) of your estate? Are they likely to work well together on a long term basis? Perhaps a professional executor would be more appropriate?
Have you got foreign property? ‘Forced heirship’ may prevent you leaving your foreign assets to the people you wish to. Specialist advice should be taken on how assets abroad pass on death. Do you want charities to benefit from your Will either in the form of a legacy or in part of your residuary estate?
Do you have a family business? Succession planning for the business is key to its future survival following your death.
What are the benefits of donating to charity under your Will?
There are many benefits, both financial and emotional, to gifting a legacy in your Will.
There is a misconception that charity only includes the more familiar medical charities that we are all aware of. Charities also include cultural, wellbeing and sporting organisations such as Leeds Playhouse, museums and heritage sites and grass roots sport amongst others.
Another misconception is that you need to own a substantial amount of wealth to make legacies in your Wills to charities that you have a strong affiliation to – every single penny helps.
If your estate will be subject to inheritance tax there are financial benefits to leaving part of your estate to charity which are:
- Any gift to charity will be free of inheritance tax;
- If you leave at least 10% of your net estate to charity then you can reduce the rate of inheritance tax from 40% to 36%. The effect of this is that you are paying less Inheritance tax as a result of making gifts to a charity (or charities) that embody your charitable aims.
We appreciate there’s a lot to think about when putting in place a Will and that’s why it’s highly recommended that you get professional legal advice when considering making or updating your Will. This is something that we at Irwin Mitchell would be happy to discuss with you in greater detail.