Making a will should be an essential

Making a will should be an essential for most people, find out how you can do it right, save money and protect your beneficiaries.

Why make a will?
It's not really a case of why you should make a will but of why you shouldn't fail to. If you die intestate (without a will) you run the risk of leaving behind a trail of stress, cost and even family feuds.

Yet research from independent financial advice website, Unbiased.co.uk found that 29.5 million adults in Britain don't have a will, and more worryingly, this includes one third of over 55s. 

Once all of your liabilities have been accounted for, such as outstanding loans or overdrafts, your remaining assets will not automatically go to your current spouse if you are without a will.

If you have no children, the law entitles your spouse to the first £200,000 of assets, and 50 per cent of the remainder - the rest could end up with your parents, brothers and sisters and other relatives.

The worst-case scenario is if you die single with no children. In this instance, and in the absence of any other surviving relatives, your entire estate and possessions are likely to be passed to the Crown.

Tax
Without a bit of forward planning, your beneficiaries (other than your spouse) will be stung for Inheritance Tax (IHT). The threshold at which this tax is payable is now £325,000 (for the tax year 2012-2013) and is set at a hefty 40 per cent.

You may think IHT only applies to the wealthy but now it is not unlikely that your property alone - especially if it's in London or the South East - falls into this category. An independent financial adviser (IFA) can show you how to minimise your IHT before you draw up your will.

You should also have a look at the Directgov website, to find out which gifts are exempt from IHT.

Making a will
It is widely recommended that you pay a solicitor to draw up a will on your behalf, especially if you think it might be complex. For a typical fee of around £200, this will ensure your will is watertight and legally valid.

It might even be that you qualify for Legal Aid on financial grounds or because you are over 70 years old.

However, there is also the DIY option. You can buy a template of a will in a stationers and simply fill it in yourself. You can find out more about this on the Citizens Advice website.

However, to ensure it is valid, you will need two independent witnesses - or just one if you live in Scotland - who will have to sign at the same time. A witness cannot be a beneficiary of the will, or be married to someone mentioned in the will.

You will also need to specify your choice of executor. This is the person who will deal with dividing up your estate and possessions when you die.

If you do not designate an executor, the state will appoint a solicitor to do this for you - and for a fee. By contrast, an executor can, and usually is, a beneficiary of your will. It is preferable to have more than one executor in the event of one of them dying before you.

You will then need to give precise details about all beneficiaries and what you are leaving to them. You should include their full name and their relationship to you as well as being very specific about any possessions you are leaving them. The clearer you are now the less likely it is that problems will arise in the future.

Altering your will
Whenever you make your will, it is always possible that a number of factors in your life will change. If this means you need to amend your will, it is important that you don't waste time in doing so.

For example, if you were single when you drew up your will, it may become invalid if you get married. On then other hand, divorce or separation does not make a will invalid so you might well want to make changes.

If they are significant alterations, you will need to make a new will which will revoke any other wills you have made.

If you just want to make minor alterations, you can add supplementary changes known as codicils - although these should be added separately and never made on the original document. Again, any alterations must be properly witnessed although the witnesses do not have to be the same as on the original will.

Why you must write a will?

Experts claim rising house prices are to blame. Properties that people bought for a modest sum decades ago have soared in value, turning beneficiaries of an estate into millionaires overnight.

Modern families also complicate matters. Today, divorce and second marriage are common, and there are often stepchildren and half-siblings. The more extended the family, the more likely the chance of a row.

Families also split up round the world, leaving some beneficiaries hard to track down.

On top of this, people are living longer, allowing for more second marriages among widows - and more time for families to fall out over the care of loved ones.

Without a will providing clear instructions, arguments are often inevitable. Yet more than half of adults in the UK have not made one, according to campaigner Will Aid.

If you live with your partner, but are not married or in a legal civil partnership, then they are not automatically entitled to anything when you die

HOW LOVED ONES COULD GET NOTHING

Failing to leave a will can have catastrophic repercussions for the people you leave behind.

If you live with your partner, but are not married or in a legal civil partnership, then they are not automatically entitled to anything when you die. This means they could be forced to sell the family home, and your money distributed according to the law rather than your wishes.

If you don’t leave a will, you are said to have died intestate.

In this instance, the law dictates that the estate goes first to the husband or wife, then to any children, grandchildren, parents, brothers or sisters, half-brothers or sisters, grandparents, aunts or uncles and any half-aunts and uncles. If there are no living relatives, everything will go to the Treasury, instead of any close friends or a favourite charity as you might have preferred.

Your will is also where you leave instructions as to who will look after your children - without these, it could be left to the whims of the courts.

WHEN LIFE CHANGES, SO MUST YOUR WILL

A will is not something that should be written once and then forgotten.

It needs to be updated whenever a significant event in your life occurs that could affect it. For example, when you have children; if someone named in the will dies; or if you divorce, separate or get married.

Solicitors typically recommend that you revisit your will every five years. And if you do update it, be sure to destroy the old document so as to avoid confusion.

It’s also crucial to talk your family through your wishes while you are alive to prevent any surprises after you die. While it’s not a conversation that anyone wants to have, it will avoid arguments between relatives later down the line.

John Melville-Smith, a solicitor specialising in disputed wills at London-based firm Seddons, says: ‘These are not dysfunctional families. They are normal people but, when emotions are running high and there is a large windfall to fight over, death can bring out the worst in families.

‘And pride means that, once the courtroom fight is over, these families rarely speak to each other again.’

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A will does not have to be fair. A person is entitled to leave their estate to whoever they please.

But it is possible to change a will after someone’s death. You can apply for a deed of variation but, for this to be approved, all the beneficiaries who are adversely affected must agree to the changes.

Or you can challenge it. The key is to prove the person was not in their right mind when they made it, and wouldn’t have done so under normal circumstances. You’ll need medical evidence or testimony from witnesses indicating that the person was too confused to make a will and didn’t understand what they were doing.

Emma Myers, head of wills, probate and lifetime planning for Saga Legal Services, says: ‘Warring beneficiaries are a real problem - it can be like a daily episode of EastEnders.

‘Grief and greed brings out the worst in people, so it’s crucial that you think of ways you can make your wishes as clear as possible before you die to avoid this.

‘No one likes to talk about their finances or dying, but do your closest relatives know where to find a copy of your will or bank statements?’ 

GUIDE: HOW TO MAKE A WILL 

The cost of making a will depends on who you get to do it and how complex it is.

You could use a DIY will-writing kit, which may cost as little as £9.99, though is generally around £40 to £50. However, this is fraught with danger. You may use language that is wrong or too vague, or misspell something.

And you may not get it witnessed properly. All of this could lead to your money not going where you intended. More importantly, you may not realise the legal consequences of anything you say.

Writing a will: Certain charities offer free, simple will-writing to specific groups

Using a solicitor may cost more (at least £150 and potentially a lot more), but it does offer peace of mind. This is particularly important if you have any complexity, such as stepchildren, children from a previous marriage, or a disabled relative you want to ensure is provided for. There are also will-writing services, such as the one offered by Which?, costing from £89 for a single, self-written will reviewed by a specialist.

Certain charities offer free, simple will-writing to specific groups: Cancer UK to the over-55s and the Stroke Association to stroke survivors. And March is Free Wills Month in England and Wales. Over-55s can get a simple will drawn up by a solicitor, but you’ll be expected to make a donation to charity. Find more details at freewillsmonth.org.uk

Then there is Will Aid, which runs a scheme every November, where more than 1,500 solicitors nationwide will write a simple will for a donation - usually £95 for a single will and £150 for a couple. The money goes to charities including Age UK, British Red Cross and Save The Children.

You’ll also need witnesses and executors. Witnesses do not have to read your will, merely witness you signing it. But they cannot be beneficiaries of your will.

Executors are the people who carry out your wishes after you die. They may be family members and can benefit from the will. It’s best to choose someone comfortable dealing with organisations, paperwork and numbers. Make sure you ask them before naming them, and keep track of them if they move.

Banks and solicitors can do this, but it can prove very expensive. Some charge fees of 2.5 per cent plus VAT or more of the value of the estate - that’s £15,000 on a £500,000 estate.

Some even double-charge, saddling the estate with an hourly fee, as well as taking a proportion of the estate. Of course, some banks and solicitors charge much less.

If you have appointed a professional executor, look very carefully at the contract and be cautious of clauses that allow them to charge a proportion of the estate’s value. Banks have a particularly bad reputation. Some offer very cheap will-writing if they are named as executor. But this is a false economy - £200 to £300 saved on will-writing can later lead to bills of many thousands of pounds, even if the estate is very simple.

The best option is to name a relative or friend as executor, but stipulate that you are happy for them to use professional help if they need it. They can then call in a solicitor for any complex tasks and pay by the hour.

Once your will is written, you need to keep it safe. Solicitors should store it for you and you can keep a copy at home.

You can make a simple change to your will by adding a codicil. This is an additional document that should not be attached or stapled to your will.

Free Wills Month - have a Will written free of charge in March

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Source: the Mail

http://www.dailymail.co.uk/money/pensions/article-2967505/When-William-died-left-300-000-son-never-saw-penny-write-will.html

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