Our Head of Wills, Solicitor James Antoniou, has been featured in the media outlining why it’s so important for the average person to make a Will, and some of the common pitfalls that people should beware of.
We share some of James’ tips and insights on making a Will.
Why is it Important to Make a Will?
Having a legally valid Will in place is crucial for anyone who wants to ensure their wishes are clear about who should benefit from their Estate after they die. If someone dies without a valid Will in place, then the law will decide who inherits everything that person owned.
This includes any property they owned and its contents, money held in bank accounts and investments, their car, personal possessions and even their pets.
How Old Should Someone Be to Make a Will?
Generally speaking, you need to be at least 18 years of age to make a Will, but beyond that it’s never too early to make a Will because no one knows what the future will bring.
It’s important to review your Will after any significant life event to ensure that it’s still an accurate reflection of your wishes. For example, getting married and divorce can impact your Will, the birth of a child or grandchild, or buying a new home may require your Will to be updated.
If your existing Will was written by Co-op Legal Services and you want to make small changes to it, then we can write new a Will for you, but only charge a total amendment fee of £60 for a Single Will or £90 for Mirror Wills. See Cost to Change a Will.
The Most Common Mistakes when Making a Will
There are many legal pitfalls to navigate when making a Will, and there’s a significant risk of things going wrong. This is especially true if the person who is making the Will doesn’t completely understand the legal implications of what they are doing and they don’t seek professional advice.
A Will is a legal document, and it needs to be written in the correct way. If someone decides to draft their Will themself without the help of a professional Will writer, then there are many mistakes or unintended consequences that they could arise.
The first of these is using language that is unclear or ambiguous. If the Will cannot be understood because of the way it has been written, then it could be up to the Courts to decide what the person’s intentions were.
Other common mistakes include incorrectly describing a gift, not executing the Will correctly, not dealing with all of the Estate’s assets or trying to gift assets that legally cannot be given via their Will (such as jointly owned assets or certain types of pensions or life policies).
Can Making a Will Help with Tax Affairs?
The Inheritance Tax rate is currently 40% and the threshold for paying this (known as the Nil-Rate Band) for an individual is currently £325,000. This means that if your Estate is worth less than this at the time you die, in theory, there should not be any Inheritance Tax to pay. However if it’s worth more then, in theory, there’s a tax charge of 40% levied on the excess value of your Estate after deduction of your liabilities (debts).
Where you have a couple, who are married or in a civil partnership, that leave their Estate to the other on the first death, then their unused tax allowance transfers to the survivor (known as the Transferable Nil-Rate Band). In simple terms, this would give the survivor a tax threshold of £650,000 (£325,000 x 2).
There has also been a further tax free allowance introduced which is known as the Residential Nil-Rate Band. This has increased the amount that can be given away on death tax free if the deceased’s home has been left to certain people. This is also transferable between spouses and civil partners (known as the Transferable Residential Nil-Rate Band) with the idea being that by the tax year 2020/21 the maximum Inheritance Tax allowance available to married or civil partnership couples would amount to £1 million.
Given that the average person’s Estate is worth less than £325,000 upon death then it is not surprising that only a very small percentage of Estates suffer an Inheritance Tax liability.
There are however a limited number of ways in which making a Will can help with Inheritance Tax planning. Certain Beneficiaries may be exempt from Inheritance Tax or cause your Estate to have a lower rate of tax applied, such as your husband, wife or civil partner as well registered charities, some organisations and also major political parties.
So if your Estate is valued over the tax allowances above but you leave sufficient gifts (legacies) to certain Beneficiaries in your Will, then the amount of Inheritance Tax that needs to be paid on your Estate could be reduced. However, if you are seeking to mitigate Inheritance Tax through your Will then I would strongly recommend you take professional tax advice about your specific circumstances because the rules can be very complicated.
I’ve always felt that the best opportunity to mitigate Inheritance Tax is not by your Will, but during your lifetime. This can be done using annual allowances or making certain types of lifetime gifts either out of surplus income or into Trust arrangements, or by holding certain investments that qualify for tax relief. Again, these rules can be incredibly complicated so make sure you take specialist tax advice.
Things to Remember when Making a Will
There are a number of factors that will need to be carefully considered when making a Will. Some of the main things to bear in mind include:
- Choosing the right Executor (the person responsible for winding up your affairs) – this is a serious responsibility and should be someone you trust. Don’t forget to choose a substitute Executor in case your first choice is unable or unwilling to act.
- Making arrangements for the care of your children – if you have children under the age of 18 then you should consider whether you would like to appoint a Guardian to look after them.
- Think about the type of funeral you would like and any special wishes that you have.
- Consider what type of Will best suits your needs, such as a standard Single Will, a Trust Will or Mirror Wills. Our Will writing advisors will help you understand the pros and cons of each.
- Finally, you will of course need to decide who should benefit from your Estate. Think about any specific gifts, amounts of money and items that you would like to leave to individuals or organisations, and what you would like to happen to the remainder of your Estate.
How to Start the Process of Making a Will
It’s a good idea to seek professional advice to ensure that your Will is legally valid and is an accurate reflection of your wishes. This being said, making a Will doesn’t need to be a complicated or time consuming process.
With Co-op Legal Services, you can start making your Will online. You can then arrange a follow up call with a Will writer, who will discuss your circumstances, clarify your wishes and draft a Will that’s tailored to your specific needs.
For initial advice about making a Will call our Will writers on 03306069591 or contact us online and we will help you.