There are many reasons why you should make a Will; here are Myerson's top ten.
1) To appoint someone to manage and distribute your estate
You can appoint an executor to deal with your estate should you pass, including responsibilities such as
- Dealing with your funeral wishes;
- Ascertain what the assets and liabilities in the estate are;
- Calculating and paying any Inheritance Tax due (if any);
- Preparing a probate application to the Probate Registry (if necessary);
- Collecting in assets, paying any liabilities and dealing with any estate tax; and
- Distributing the estate following the Will.
The administration of an estate can be complex; therefore, your executor may need to instruct a solicitor.
2) To decide who will inherit your estate
You may leave your estate to your loved ones to provide them with financial security. If you do not make a Will, you may have less control over who will benefit from your estate, as your assets will be distributed per the intestacy rules.
Under the intestacy rules, the person(s) who inherits your estate will depend on which of your relatives have survived you. Therefore, if you do not make a Will, someone you do not intend to inherit could benefit from your estate. Equally, someone such as a cohabitee or your step-child may not be able to benefit from your estate. You may wish to review our blog "How Do the Intestacy Rules Impact Cohabitees and Step-children?" for further information.
3) To protect your dependents
You can include a trust in your Will to protect your dependents, such as minor children. The trust can also be useful if you have been married before and have children from the previous marriage to ensure that your new spouse and your children are looked after when you die.
4) To maximise available Inheritance Tax exemptions
Remarrying after a spouse passes away is not unusual, which sometimes means additional Inheritance Tax bands are available. If the Will is structured correctly, it is possible to utilise unused Inheritance Tax bands to further mitigate Inheritance Tax.
5) To consider your business succession
When making your Will, you can consider who should inherit your business when you die. It will be a good time to review the company's articles to ensure there are no restrictions on leaving your business to your intended beneficiaries. You may also wish to consider Inheritance Tax planning tools such as a discretionary trust for your business shares. It is important to have a business continuity plan for when you die and if you lose mental capacity.
6) To donate to charity
Making a gift to charity in your Will may lower the rate of Inheritance Tax. If you leave at least 10% of your estate to charity, the Inheritance Tax rate is reduced from 40% to 36%.
7) To help avoid family disputes
It is important to ensure your Will is validly executed and regularly updated to help avoid costly disputes when you die. It is always helpful to have everything set out clearly in black and white.
8) To appoint a legal guardian
Including a guardian in your Will ensures that you have appointed someone you trust to look after your minor children when you die. If you do not include the guardianship clause in your Will, the court may decide who has parental responsibility for your children under 18.
9) To record your funeral wishes
It is useful to express your funeral wishes in your Will as guidance for your family and your executor. You may also draft a separate letter of wishes alongside your Will which can provide more detail and be regularly updated without having to rewrite your Will.
10) To review your Inheritance Tax position
Making a Will is a key part of your estate planning. By taking professional advice, you can consider your options for mitigating Inheritance Tax. You may qualify for the relevant Inheritance Tax reliefs if you leave your estate to your spouse or civil partner or your property to your direct descendants, for example, your children.
