A Guide to Writing a Will

Above all, it gives you the chance to decide how your assets are shared in the event of your death; if you don’t have one, the law decides who gets what.

Similarly, a will can also offer peace of mind for unmarried couples. By writing a will you can ensure your partner is provided for, while if you’re a divorcee you are also able to stipulate whether or not you want to leave anything to a former partner.

Aside from this peace of mind, it also makes good financial sense to set down your last wishes in a will. This way you can make sure you don’t pay any more Inheritance Tax than is necessary and, should you wish to leave some money to charity, a will ensures they won’t have to pay as much tax on your gift.

What Will Happen If I Don’t Write a Will?

Intestacy laws are used to distribute your assets if you die without leaving a will. This could mean that people you wished to bequeath to, such as an unmarried life partner who, under intestacy laws has no claim on your estate, are left empty handed. At the same time, others who you do not wish to leave money to could inherit a great deal.

It is worth noting that if you are your home’s sole owner it may not automatically go to your spouse or cohabitor.

Unless you leave instructions specifying otherwise in most cases your estate will be divided like so;

• If you are married with children, your spouse will all inherit all personal property and assets up to the value of £250,000, as well as a life interest in half of what remains, all of which will go on to your children.
• If you are married but childless, your spouse will inherit everything up to the value of £250,000. The rest will go to your closest blood relatives.
• If you have no legal partner, your children will inherit everything.
• If you have no close relatives, your money could go to the state.
• Only close relatives, current civil partners and current spouses are recognised by intestacy law.
• Friends, ex-partners and extended family will have no claim, even if they were very close to you.

These are the general guidelines, however, these change if the amount you leave is over £450,000. The laws are necessarily complex in order to deal with the huge number of possible scenarios which can arise. You can find out more on intestacy law here.

Who Can Write a Will?

In theory, anyone can write a will, so long as they follow the correct procedures. In fact, many banks and law firms offer DIY will-writing kits, complete with a template document, enabling you to fill in all the necessary details in your own time, often for as little as £20.

However, while going it alone may save money in the short-term, DIY wills can lead to expensive and potentially traumatic problems for your loved ones further down the line.

As such, it’s strongly advised that you seek out expert professional advice. Feel free to shop around and ask several solicitors for a quote. The Law Society will provide you with an impartial list of the solicitors in your area, many of whom will be happy to visit you at home or in hospital.

All wills need to be correctly signed and witnessed and they will also need to be stored in an official and safe facility, for example with a solicitor or in a bank vault.

Once you have arranged this, it’s advisable to tell the executor of your estate where your will is, and be sure to have a copy you can keep for yourself.

Tax Issues

Bear in mind that your beneficiaries may have to pay inheritance tax on the assets you leave them in your will.

As of 2011, the inheritance tax threshold (also known as the nil-rate band) stands at £325,000. That is, anything under that is exempt from tax, but should your estate be worth more than this, your beneficiaries will have to pay 40 per cent in tax on anything above this mark.

Married couples and civil partners are permitted to combine their tax allowances, again depending on the size of their individual estates. You should also bear in mind that you can leave any amount you wish to your spouse and they will not have to pay inheritance tax.

As a result, one popular method that married couples use to avoid inheritance tax is to spilt their estates as evenly as possible between the two of them. This allows both partners to leave an amount as close to the tax threshold as possible to their children, whilst leaving the rest to their partner. This way, if either partner dies, there will be no inheritance tax to pay on their estate.

Additionally, anything you leave to charity is likely to be exempt from inheritance tax.

As before, consider getting professional help if tax issues confuse you, or in the case of charity legacies, most organisations, including MacMillan Cancer Support, will be happy to offer you advice on writing a will.

Remember there are alternatives to a will. You can also leave money in a discretionary trust and, if done with the help of an expert in tax laws, this can save your loved ones from paying more tax than is necessary. However, this is a complex issue and you may need professional help to make the most of your assets.

When to Write a Will

While most people would associate the writing of a will with getting old, finance experts advise everyone to get their affairs in order, whatever the size of their estate and whatever their age.

More specifically, writing for the BBC, lawyer Ian Burman advises that you should definitely look into getting a will when you buy your first property, particularly if you are buying a home with someone else.

Other key life milestones when it’s wise to either write or revise a will are when you get married, divorced, re-married, have children or move house.

Additionally, as you get older, the people you named as potential inheritors of your estate may start to die, making your will out-of-date and in need of revision.

Further Reading

• Read the Citizen’s Advice Bureau’s guide to making a will.
• These tips for writing a perfect will provide a good outline to follow.
• Use our guide to avoiding inheritance tax to make sure your legacy goes to your loved ones, not the state.