Having a will in place protects your loved ones and ensures that your estate is dealt with according to your wishes. Without a will, your assets may end up in unintended hands, such as the government.
Whether you never made a will, or if this wasn’t correctly written, the rules of intestacy would be followed if you were to pass away without a valid will. This can have a bearing on the Inheritance Tax (IHT) you pay. The amount of inheritance tax that could be charged depends upon the value of your estate, as well as who you leave it to.
Read on to discover the top reasons why making a will is essential.
What is a Will?
A will – also known as a Last Will and Testament - is a legally binding document which declares how you wish your assets and wealth to be distributed after you pass away.
Preparing how to manage your money after you die is an enormous task. It’s vital to your family and loved ones’ future. That’s why Reeves Independent are here to help you make the best decisions possible.
Here are the top three reasons why you should make a will.
1. Naming your children’s guardian
When writing a will, you aren’t just deciding upon financial matters – you also have the final say as to who should look after your dependents. i.e., your children. If they’re under the age of 18, you can also appoint their legal guardians.
Ensuring your dependents and children are being looked after by the right people is of paramount importance for their happiness and future credentials. You can have your say by writing a will.
2. Avoid paying more inheritance tax than you need to
Intestacy is when somebody does without leaving a valid will. Whether that is because they never made one, or if it was because it wasn’t correctly written, this is the term for not leaving a will. This can have a bearing on the Inheritance Tax (IHT) you pay.
The amount of inheritance that you could be charged from your estate depends upon the value of the estate, as well as who you leave it to.
Anything that you decide to leave to your spouse or civil partner will automatically be exempt from IHT. Furthermore, handing over the property to your children & grandchildren is very likely to generate a lower IHT bill than leaving it to others.
3. Remove the cost, time and stress
Automatically assuming your loved ones will get an inheritance is a bad mistake to make. You need to ensure you create – as well as update – your will to be sure that your estate goes to exactly who you want it to.
Probate – which is the process of a will being proved in a court of law as a valid document – can be a very long and drawn out – not to mention expensive – process for your family. Moreover, it only addresses your current circumstances.
You can make changes down the line if your circumstances change, or you don’t agree with your previous decisions – just make sure you keep on top of the changes.
What happens if you die without a will?
The rules of intestacy will decide who your estate is divided up. Therefore, you have little control of who benefits from your estate.
The articles are for information only and should not be construed as advice or a recommendation. The investment strategies mentioned are examples only and may not be suitable for your particular: circumstances, tax position or objectives. Please seek independent financial advice before taking any action. The Financial Conduct Authority does not regulate tax and estate planning, including wills and probate services.
No advice should be conferred from the articles. No action should be taken without independent professional financial advice as any actions on your pension may be irrevocable and have a big impact on your income in retirement.