Do I need to make a will?
Research suggests that more than half of UK adults do not have a will, yet for two months every year, people in the UK can have a solicitor draft a Will free of charge as part of Free Wills Month.
Why is making a Will so important and do you really need to make one? Castlefield adviser, Michael Owens explains more in this useful piece.
What is a Will?
A Will is a legal document that lets you decide what happens to your money, property and possessions after you die. Having a Will in place ensures that your estate is distributed in line with your wishes and can save your family and friends time and money. It can also make sure you don’t pay more inheritance tax than you need to. If you die without having a Will in place, your estate will be distributed by the rules of intestacy which can become quite complicated.
Having a Will in place ensures that your estate is distributed in line with your wishes
Who should make a Will?
Essentially everyone should consider making a Will. It’s especially important for partners who aren’t married or in a civil partnership, as you cannot inherit from each other unless there is a Will in place. Even married and civil partners won’t automatically inherit everything if you have children. Anyone with children or dependents should consider making a Will to name a guardian, appoint trustees of your child’s inheritance and set out a plan for your child’s finances.
What changes affect a Will?
It can be important to revisit your Will if your circumstances change. For example, what happens to a Will when you get married or enter into civil partnership? It is automatically revoked. On divorce the Will remains valid but if your former partner is named in your will, they will be treated as if they died before you. It can be a good idea to review your Will every 5 years. Other changes that should prompt you to consider revising your Will include when you have children, move home, receive an inheritance or the executor of your Will dies.
It can be important to revisit your Will if your circumstances change
Estate Planning and Inheritance Tax (IHT) changes
Making a Will is not just about specifying who receives what - it plays a key role in estate planning and can help minimise your inheritance tax (IHT) liability. In the UK, estates worth more than £325,000 are subject to a 40% IHT charge, although this threshold can be increased to £500,000 if passing the family home to direct descendants. Recent IHT changes announced in the Autumn Budget could affect tax-free allowances and exemptions, making it more important than ever to structure your estate efficiently.
One effective way to reduce IHT liability is through gifting, setting up trusts, and making charitable donations - all of which can be outlined in a well-structured Will. For example, gifts to charities are exempt from IHT, and if you leave 10% or more of your estate to charity, the IHT rate on the remaining estate can be reduced to 36%.
Given how complex IHT and estate planning can be, it’s always a good idea to chat with a financial adviser to make sure everything is set up in the best way for you.
What is Free Wills Month?
Free Wills Month takes place twice a year – in March and October – to give individuals aged 55 and over the chance to have their Will written or updated at no cost. This initiative provides a vital service, ensuring that individuals can put their affairs in order without financial barriers. The initiative is funded by charities, with the hope that participants may choose to leave a charitable donation in their Will. While many people leave between £300 and £500, there is no obligation to do so. It’s also worth noting that Free Wills Month covers the writing of ‘simple’ Wills – your Will is more complicated, you may need to pay for the service yourself.
Creating a Will is one of the most responsible decisions you can make to protect your loved ones and ensure your wishes are followed. Whether you take advantage of Free Wills Month or arrange one independently, making a Will should be a priority for everyone.
Written by Michael Owens
Sources:
https://www.canadalife.co.uk/news/over-half-of-uk-adults-do-not-have-a-will/
https://www.ftadviser.com/your-industry/2023/04/05/half-of-uk-adults-do-not-have-a-will/