Article written by Angela Shaw, Private Client Solicitor
Deciding to make a Will is one of the most important decisions you can make for the future but knowing where to start can be challenging. This article provides a practical checklist to help you prepare for drafting your Will with confidence.
List your assets
Before drafting your Will, it is important to take stock of the assets that comprise your estate. While the intention is not to anticipate an imminent passing, thoughtful planning for the future begins with a clear understanding of your estate. List each of your assets, property, investments, pensions and personal belongings. Assess their value and total them up. Next, list all your debts and, again, total them. Take your debts from your assets and you will arrive at your net estate. This is the figure on which Inheritance Tax is calculated.
Listing your assets will help you decide who you should allocate those assets to.
Address digital assets
We would strongly advise you not to forget to address your digital assets. These include:
- Your email
- Social media accounts
- Digital music library
- Photo and video collections
- Files on your computer or stored online
- Crypto assets
You will need to think carefully about these and how you can allow someone to access them after your death so they can, where possible, be distributed according to your directions.
Plan for Inheritance Tax
Once you know the extent of your estate, you will discover whether you have a potential Inheritance Tax problem. Inheritance Tax becomes payable when the net estate is more than £325,000. There are several exemptions and allowances, notably no inheritance tax payable for transfers between spouses or civil partners. However, that might not be the best option.
We would advise you to seek professional advice to discover the options to mitigate against or eliminate Inheritance Tax.
Decide on your executor(s)
Your executor is key to the proper and efficient administration of your estate. You must make the right choice. Select someone you trust to deal with your estate after your death, as they will be charged with following the instructions in your Will.
It is also sensible to appoint a joint or substitute executor. When you do this, should one of them die, the survivor can deal with the administration of your estate.
Identify your beneficiaries
Before putting pen to paper, consider who you wish to share in your estate and how much you want them to share. For example, do you wish to leave specific items to anyone or direct a bequest or legacy to a charity or community organisation? Make a list of your beneficiaries and what items or share in your estate you intend to leave to each.
Decide on residuary estate
After deciding on specific bequests and legacies, you must consider who should receive the remainder of your estate. This is called the residue, meaning anything left after individual estate items have been dealt with. You must decide how the residue will be dealt with as failure to do so will mean any residue will fall into intestacy and be dealt with under the law of succession.
Prepare for unexpected events
Consider what you would like to happen to bequests or legacies or the residue of your estate if those you’ve directed to receive them should die before you do. Make provision in your Will to ensure that if someone you’ve named dies or, in the case of a charity or community organisation, ceases to exist, the share in the estate they were to receive is re-directed elsewhere.
Consider appointing a guardian
If you have young children, you need to think about who you would wish to look after them if you and their other parent were both to pass away. In these circumstances, naming a guardian for any minor children is essential. It is vital to discuss the guardianship with those you wish to appoint to ensure they are prepared to take on the role. You will also need to consider what financial arrangements you need to put in place to provide for your children until they reach the age of majority.
Similarly, if you have a disabled child, you should consider what guardianship provisions are required, especially as that child grows into adulthood, where a court process is necessary to formalise the guardianship.
Sign your Will properly
You must sign your Will correctly. It must be signed at the end in the presence of two witnesses who must also sign. The witnesses must not also be beneficiaries of the Will.
Store your Will safely
Once you have drawn up and signed your Will, keep it secure and inform your executor(s) of its location. That means it will be easily found following your death.
Review your Will regularly
Once you’ve made a Will, it is essential to keep it under review. You should revisit and update your Will after significant life events such as marriage, divorce or having children. Examples of this may include increasing your wealth significantly, inheriting a large sum of money or a high value property. In that case, you should consider the impact on your estate and whether you need to review your Will and any Inheritance Tax plans.
It also makes good sense to review your Will every three or five years to check the intentions you set down in your Will remain your intentions at that point.
Consider a letter of wishes
You can always write a letter of wishes for your executors to guide them on how you would like your estate dealt with. This letter might include details of how you would like your funeral handled. A letter of wishes is informal and non-binding.
Seek legal advice
Last, but by no means least, when you decide to draw up your Will, you should seek legal advice. By seeking legal advice, you will have peace of mind knowing your Will has been prepared by a professional who is experienced in the field and that your Will is competent. The last thing you would want is a Will that is flawed and open to challenge, bringing confusion and upset to your beneficiaries.
For further information on Wills and future planning, please feel free to email me or contact the Private Client team on 020 8858 6971.