Writing a will is critical so that your possessions and property go to the right people after you die. In the UK, you must follow specific rules and regulations to ensure your will is legally binding.
If you follow the rules, you can be sure that your estate is divided exactly as you want it with as little trouble as possible.
Why make a will?
There are lots of reasons to make a will. The most important reason is that it gives you full control over what happens to your money and possessions after death. If you don’t make a will, then the law will determine how your property and possessions are divided. This usually means that your possessions pass to your closest family members – regardless of whether you wanted this to happen.
How do I make a will for my property?
As part of your will, you need to say what you want to happen to your possessions, including your property (or properties). There are certain things you need to consider – for example, if you have any overseas properties, or if those properties are placed within a foundation or trust. For more complex arrangements, it’s advisable to involve an experienced solicitor to help you make the right decisions.
What makes a will invalid?
A will is invalid if it does not meet the correct legal criteria. Here are some of the key guidelines you must follow:
- Your will must be written down.
- You must sign your will.
- Your will must be signed and witnessed by two people (but not beneficiaries of the will, or their spouses or civil partners).
- You must have the mental capacity to create the will and understand its contents.
- You must make your will by choice and without pressure from others.
- Your will must exclude any previous will you have made (where applicable).
Making a will checklist in the UK
So, what must you do to create a will in the UK? There are several things that almost everyone will need to consider when writing a will. Here are some of the most important steps to take:
Choose who will ‘execute’ your will
The person who executes your will manages your estate and ensures that property and possessions pass on to the correct people in accordance with your will. This is a significant responsibility, so you must ask them first and let them know critical information about your will (for example, where your will is stored and if there are any copies). Therefore, they must be competent and mentally astute enough to manage this process.
Once you pass away, the person you choose to execute your will can apply for ‘probate’ so that they can divide your estate after you die.
Consider power of attorney
Power of attorney means that you nominate someone to take care of financial and healthcare decisions for you if you lose your mental capacity to make these decisions. For example, if someone is diagnosed with a degenerative disease like dementia, they may want to assign power of attorney to a trusted relative.
Specify who will inherit your estate
This is why it is important to write a will. You can clearly state who inherits what – and any individuals whom you want to exclude from your will. This is all up to you, so you must note the specifics. For example, suppose you’d like to leave money to a charity or ensure that younger grandchildren access your inheritance when they are 18 years old. In that case, you must make this absolutely clear in your will.
The same applies to specific possessions. If you’d like to pass on a particular heirloom to someone, you must state this in your will alongside their full name and address.
Account for overseas property
If you own property overseas, then it’s best to structure your assets so that they attract less tax. This is a complex process because you must account for any property in the UK alongside your overseas homes. For example, you may benefit from assigning your property to a trust or foundation. It’s essential to get advice from a wealth management firm if you’re facing this situation.
Decide what happens to your business
If you own your own business, you must decide how to pass it on after you die. The same applies to any shares you might hold in another company. This means you should consider the structure of your business so that certain people can legally receive shares when you’ve gone.
For example, you may need to alter the articles of association or nominate new shareholders.
Check if inheritance tax applies
If your estate exceeds the value of £325,000 (subtracting debts and loans), then you will likely need to pay inheritance tax. The main exception to the rule occurs when you leave everything over the value of £325,000 to your spouse. The rules about inheritance tax are complex, and it’s best to seek legal advice to ensure you pay what you owe and work out if you’re eligible for tax relief.
You will be taxed at 40% on any assets above the £325,000 threshold. For example, if your estate is worth £400,000, then you will face a 40% tax on the extra £75,000 and pay a total of £30,000 in tax.
You could have more inheritance tax written off in some circumstances. For example, you may be eligible for the ‘residence nil-rate band’ – if you pass on your main home to your children or grandchildren. If this applies to you, you qualify for an extra £175,000 tax-free above the £325,000 threshold. However, if your home is worth over £2M, then your tax-free allowance will decrease by £1 for every £2 above the £2M property value.
How much does making a will cost?
The costs vary from person to person, depending upon how much you involve a solicitor. Technically, using a solicitor is optional, and you are not legally obligated to use will-writing services. However, you may be left with little choice if your will is complex and difficult to execute. For example, this can happen when the deceased owns property overseas or wants to pass on a family business.
Costs also vary between solicitors, so it is best to look around to find the option that suits you. Generally, the more hours you require a solicitor, the more it will cost. Costs can also be determined by the complexity of the will. For that reason, it’s a good idea to decide on the vast majority of your will before choosing a solicitor. This will lessen the time they need to spend with you and the amount you pay. That way, they can simply shape the will you have written to fulfil the legal guidelines.
Ways to cut down on costs
Many free options and templates are available to help you reduce costs. For example:
- Services via an insurance policy – sometimes, certain life insurance policies can pay for some of the solicitors’ fees with a small amount of excess.
- Services via your union – If you’re part of a union, they may offer will-related services for free (or at a reduced rate).
- Services via Will Aid – Will Aid is a partnership of charities that invite solicitors to draw up wills for free during November. Anyone can apply, and you can search the website to find participating solicitors in your area. Rather than charging a fixed price, they only ask for a donation to the charity. This is an excellent way to cut costs on writing your will.
- Use a free template for UK wills – Another easy solution is to use a free will template. Many legal firms offer this service on their website. The big advantage is that their templates are legally sound, so it reduces the errors you might make if you write your own will from scratch.
What happens if you don’t make a will?
You will be considered ‘intestate’, and the government will divide up your property and assets according to law, without your input. This is bad news for you and your family, so writing a will is vital.
While the rules governing inheritance are complex, there are several unpleasant consequences that may arise if you choose not to write a will.
- Your partner could get nothing – Unless you are married, or in a civil partnership, your assets will be divided elsewhere (for example, to close blood relatives).
- Your spouse may inherit everything – If you are married/in a civil partnership, your spouse is likely to inherit almost everything you own – whether you want this or not. Critically, this can still occur if you have chosen to separate but never filed for divorce.
- Your children may get nothing – Your children may not automatically inherit a share of your assets if you don’t write a will.
Making a will template
A free will template is a perfect solution if you need help determining where to begin when writing a will.
How does a free will template work?
While these templates vary, many of them guide you through each piece of information you need to include. That way, nothing is left out, and the will created will fit your situation perfectly. Choosing a will template is ideal if your will is relatively simple, and even if not, it’s an excellent place to start. Once you add information to a template, you’ll quickly see where to consult a solicitor or seek further advice.
Making a will can be a difficult process, but its best to get started early to make sure your property and possessions go to the right people after you’re gone. Thankfully, free will templates have simplified this process so that you can create your will with more peace of mind and greater accuracy.