This guide explains:
- how to make or update your will
- what to include in your will
- who to include in your will
- whether you should use a solicitor
- how inheritance tax is calculated
We hope you will find this information useful, but please note it should never be relied upon as a substitute for specialist professional advice.
Making or updating your will
Whatever you leave when you die is called your estate. This is everything you own, including your share of things you own jointly, minus everything you owe. It may include money, property and belongings.
A will is a legally binding document that includes your instructions for what you would like to happen to your estate after your death. It gives directions about your finances and personal belongings. It may also include instructions for funeral plans and, if relevant, details of who will look after young children.
An up-to-date, professionally written will is incredibly important. It’s the only way to ensure your wishes are carried out after you die and that your loved ones are provided for in the way you want them to be.
If you die without making a will, you are called an ‘intestate person’ and the law decides who inherits your estate. This may not be the way you would like to leave your money and possessions.
Your property, money and belongings would be shared out according to the statutory rules of intestacy. These rules are very strict on who inherits an estate and don’t, for example, provide for unmarried partners or stepchildren.
Making or updating your will may be easier and more affordable than you think. This step-by-step guide will help you prepare for a meeting with your solicitor.
Depending on where you live, the rules that apply to wills will be slightly different. Your solicitor will explain how these rules might affect your will. They will also explain who will inherit your estate if you die without a will.
Making changes to your will
A codicil is a supplement to a will that makes changes and allows additions to be made. Many charities produce these forms to make it easier to add a gift to your will.
For some people, creating a new will may be the best way to make changes.
What to include in your will
It’s surprising how the value of your home and possessions can add up. The table overleaf will give you an idea of the value of your estate and can also help you make a record of everyone you would like to include in your will.
Property and assets abroad
These may need to be covered by a will in that particular country. To be sure, consult a solicitor.
You will need to choose who you want to act as your executors (people responsible for carrying out the instructions in your will). It is important that these are people who you have complete trust and confidence in.
If you are a parent with young children, you should also decide who you want to be your children’s guardian or guardians, in the event that both parents die when the children are under 18 (16 in Scotland). For many people, this is the most difficult decision they have to make while writing their will, though it may be the most important.
Who to include in your will
Make a list of all the family and friends you want to remember and consider the types of gifts you want to leave them. For example, you might want to give a specific amount of money, or an item with financial or sentimental value. Once you’ve provided for your loved ones, you may want to consider supporting your favourite cause. You can give a percentage of what’s left of your estate, or a specific sum of money. Legacies left to charities can make a vital difference.
Should I use a solicitor?
We recommend you use a solicitor when making or updating your will. This ensures all legal procedures are followed. The process needn’t be lengthy or expensive, but don’t be afraid to shop around or ask for a quote.
Wills can be made face to face with a solicitor or over the phone. After your first call or meeting with a solicitor, he or she should arrange a follow-up appointment to check your will has been written how you want it to be. You will then need to sign it with two witnesses present. The witnesses must also sign the will for it to be valid.
You might like to consider creating a folder containing details of all your personal wishes containing information like your funeral wishes or who you would like to look after your pets. If you would like a helpful template for this please contact the Hospice on 01606 555813.
Inheritance tax will be paid on any part of your estate that is greater in value than the ‘tax-free threshold’ (also called the ‘nil rate band’). The tax-free threshold is set by the UK government and is currently £325,000 per person. This amount is frozen until April 2018. So, if your estate is worth less than £325,000 after anything you owe is taken out, there won’t be any inheritance tax to pay at all.
Any amount above the tax-free threshold is taxed at 40%. For example, if your estate is worth £400,000 after anything you owe is taken out, the first £325,000 is free of tax. Tax of 40% will be paid on £75,000, which is £30,000. There are some exceptions to this rule, where inheritance tax doesn’t have to be paid.
If you die and leave your estate to your surviving husband, wife or civil partner, your tax-free threshold is unused. Your whole estate will pass to them free of inheritance tax. When your surviving spouse or civil partner dies, they can pass on an amount of up to £650,000 (two tax-free thresholds) free from inheritance tax.
If you leave a gift to a charity in your will (known as a charitable legacy) it will be deducted from your estate before the amount of inheritance tax is calculated.
If you leave 10% or more of the net value of your estate (after the deduction of anything you owe and the tax-free threshold) to charity, any part of your estate that is subject to inheritance tax will be taxed at 36% rather than 40%. For advice on saving inheritance tax, speak to your solicitor when making your will or, if you prefer, a financial adviser.
Everyone should have an up-to-date will, regardless of age or health, and it’s easy to make one. Here’s a reminder of the most important points to consider:
1. What do you have to leave?
Make a list of everything you own and everything you owe to give you a good idea of the value of your estate.
2. Who would you like to include in your will?
Make a list of the people, pets, charities and organisations you would like to leave a gift to in your will.
3. Who should be the executors and guardians (if appropriate)?
Decide who you want to fulfil these vital roles in your will.
4. Use a solicitor and ask about inheritance tax
This information is intended to support you in your will making process and should not be used instead of advice from a solicitor.
5. Update your will to reflect major life changes
In England, Northern Ireland and Wales, marriage or civil partnership will revoke (cancel) an existing will, unless it specifically states it takes a forthcoming wedding or civil partnership into account. So if you have married or become a civil partner since making your will, you may need to make a new one.
Divorce or dissolution will also impact on any existing will (but will not revoke it). In this case, you should review your will. If you’ve had children or grandchildren, or met a new partner, you may need to update it to include them. You may also need to change your will to take account of changes in your finances.
6. Keep it safe
Leave your original will document in a place where it will be secure and easily found, for example, with your solicitor. Keep a copy yourself and make sure your executors know where it is. You may also want to leave important documents together in a safe place where they can be easily found, for example, with insurance policy details.
You or your solicitor can register your will with Certainty, the National Will Register, for free (normally £30).