Making a Will – what are your options?

Making a Will is a positive act which will greatly assist your loved ones when you pass away. By making a Will, you can have peace of mind in the knowledge that your wishes shall be carried out. With a little planning, you can ensure that your wealth and the gifts you wish to make reach the right people at the right time with tax being minimised where possible.

Without a Will:

• Your assets shall pass in accordance with the Intestacy Rules, which does not necessarily mean that your assets shall pass to those whom you consider closest to you.

• You will not pass any assets to people who are not directly related to you, including step-children, common law spouses, or to your favourite charities.

• If you are separated but not divorced, your estranged spouse could still inherit and be responsible for administering your estate.

• You will have no say in who will look after your children if they are under 18 when you die.

• You will have no control over the age at which your beneficiaries shall inherit.

• There could be increased cost and delay in administering your estate.

It is not practical for couples to make “joint Wills” as, with these Wills, both parties must be in agreement for the Wills to be changed or revoked. Thereafter, when one partner dies, the joint Will automatically becomes irrevocable, meaning the survivor’s Will cannot be changed from that point on. Couples are advised to make individual Wills, even if both Wills say the same things, and these are commonly known as “mirror Wills”.

Executors and Trustees

These are the people who will have the legal authority and responsibility for administering your estate and carrying out your wishes. If your asset base is complicated, this can be quite an onerous task covering a whole range of matters. You should appoint people who are over the age of 18, who you trust implicitly, and who are financially astute.

It is not uncommon for independent professional Executors and Trustees, such as a solicitor or a solicitors’ firm, to be appointed either for the assistance of their beneficiaries or to ensure that there is fairness in executing the terms of the Will in practice.

The people who you appoint as your Executors will usually also be appointed as the Trustees of any trusts which might arise under your Will. However, separate people can be appointed to perform these roles if desired.

Options for your estate

It is important that your Will sets out who is to receive whatever property has not otherwise been dealt with in your Will. All of the assets you own at your death that have not already been gifted in your Will, after any liabilities have been paid, form your residuary estate.

When thinking about who should benefit from your residuary estate, please remember that it cannot be predicted in what order people will die. Accordingly, you might want to make provision for your beneficiaries’ families, should a particular beneficiary die before you. This is often thought of in the context of somebody leaving their estate (or part of it) to their grandchildren if their child has pre-deceased them. As such, you need to consider what age you wish younger beneficiaries to inherit.

There are two main options for dealing with your residuary estate in your Will.

First, you could create a basic Will which passes your estate outright to your chosen beneficiaries (at a predetermined age, if appropriate). A basic Will is simple and the benefits are that the beneficiary will have unrestricted access to and absolute control of the assets they inherit.

However, it is important to consider the fact that you do not know the date on which you will pass away, and you therefore do not know what your beneficiaries’ circumstances will be at that date. There is a considerable danger your beneficiaries will inherit a sizeable amount when a number of factors might make that inappropriate. For example, the beneficiary may be going through a divorce or a breakdown in relationship, tax issues, bankruptcy, gambling/alcohol/drug addiction, etc.

In order to offer more protection for your estate once you have passed away, you could instead incorporate a trust structure within your Will. The trust would be designed to benefit your chosen beneficiaries, but with the ability for the people managing the trust (the “Trustees”) to decide when/if funds are distributed. This can be extremely valuable, as the Trustees can provide financial support as appropriate, but whilst retaining/restricting access to the capital if there is good reason to do so.

A Will of this nature would be accompanied by a “Letter of Wishes” – a document setting out your intentions. This is not legally binding (as making it binding would undermine the discretion which is crucial to the protection), but it is highly persuasive.

Other matters to consider when making a Will

You should also consider whether you would like to leave any specific items or specific amounts of money to certain individuals. Furthermore, if you have children under the age of 18, you should ensure that you appoint guardians in your Will to set out who you would intend to take parental responsibility for those children in the event of both parents passing away. You can also set out your funeral wishes within your Will, if you should so wish.

Not only does making a Will give you peace of mind that you have adequately accounted for your wishes for your estate after death, but Wills can also be extremely useful for mitigating against tax for both your own estate and the estates of your chosen beneficiaries for generations to come.

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