Wills: some key facts and tips
By Mike Narouei, Content Producer at Boring Money
3 May, 2017
Most of us would like to be remembered fondly by our nearest and dearest, but money sometimes gets in the way. Feuding families have fought decades-long legal battles over poorly planned legacies. If you’re a parent, you can avoid further heartache and hassle after your death. Don’t stop reading! It can be done quickly and it doesn’t have to cost the earth.
Disputes over wills are rising – law firm Hugh James reported that there were 178 disputes about legacies heard in the High Court in 2014, compared to 97 in the previous year. Normal people don’t have the financial resources to go to court and may find other ways to vent their frustration: The Daily Mail featured the case of Tony McGuire, who took a sledgehammer to a £300,000 house after a row with his siblings over ownership. My brother’s annoying but that’s extreme...
A will is the best way to ensure that your assets – home, savings, pensions – are distributed as you want them to be after your death. It is particularly important if your affairs are ‘complicated’ – multiple marriages, step-children, dependent pets (you’d be surprised!) etc. It is also a means to minimise inheritance tax (https://www.boringmoney.co.uk/learn/articles/inheritance-tax-a-guide/), which is charged at 40% on legacies worth over £325,000. So if you leave £500,000, your beneficiaries would pay 40% on the £175,000.
From 2017/2018 there is an extra £100,000 allowance free from this tax if part of your estate is your home.
A will can help remove some complications around inheritance tax.
You have various options when making a will: you can go super-cheap, buy a £10 DIY will (https://www.boringmoney.co.uk/learn/articles/diy-will-kits/) kit from Amazon or WHSmith and do it that way; some charities will do it for free in the hope that you remember them when making your legacy. In the mid-range are online providers, such as Co-op, which charge a fixed fee of £150 including VAT for a single will, or certain solicitors. Irwin Mitchell offers an online service for £145+VAT. The most expensive option is to instruct a solicitor, but it can be worth it for those with more complicated estates. The best solicitors will have a Wills and Inheritance Quality Scheme mark.
You will need to consider four things when making your will: your assets, your beneficiaries, who will act as executors (who have responsibility for managing and administering your estate) and guardians if you have children under 18. Assets include all your property, savings, debts, and your possessions. The beneficiaries of your will are those who would get your assets, you can make inheritance conditional or earmark it for certain things, such as university fees.
Giving different people different assets can cause problems. Assets may dramatically increase or decrease in value, which can leave an unintended skew in the distribution of your wealth. This is a particular problem if you don’t plan to update your will frequently. It is worth noting that marriage invalidates an existing will, so you should make another one should you re-marry or turn into Joan Collins.
The braver among you may want to share the contents of your will before you die with your beneficiaries. This can help head off familial disputes or at least gives you a chance to defend yourself, if you feel so inclined! An explanatory letter to all interested parties explaining why you have distributed your wealth as you have done can work wonders.
Wills are important if you want to rest in peace. It may take you a couple of hours to think through and document, but it may save your family years of battle and you’ll know that your wishes for your kids have been documented.