Why make a will?
- Who can make a will?
Anybody of sound mind over 18.
- I don't have any money so why should I make a will?
You would be surprised, most of us are richer dead than alive, but even if you do not have much estate the will can also allow you to appoint an executor and also guardian for any children.
What happens if I do not make a will - I am married and have young children?
Irrespective of whether you have children or not, the State in the absence of a will determines who gets what. In this case, your spouse gets everything up to £125,000 plus your personal possessions.Anything remaining is divided in two - half to your children at 18 and half in trust during your spouse's lifetime. On your spouse's death the other half then goes to your children. If you have a house in your own name then it is possible that your wife or husband would not inherit the whole of the house. Also you must ask yourself if 18 is too young for your children to inherit?
I am unmarried but live with my partner, does this matter?
It is important you remember that your partner is not related to you at law if you are unmarried, and they will not inherit any of your estate under the Intestacy Provisions. The law may change to protect partners, but it has not yet.
I have just got married / I have just got divorced, are any changes needed to my will?
Congratulations if you have just got married, but unless your original will was made in contemplation of marriage, then you will have to make another will as the old one will be revoked.
Commiserations if you are getting divorced. Proper financial arrangements will have to be made for your spouse in the divorce, but you may not have to make a new will as from 1982, changes normally occur to the effect as if your former spouse is omitted from your will. However, it would be better to draw up a new will and to take detailed advice.
What about my business?
On your death whether you are a sole trader in partnership or own shares in a family limited company, your share of the business and goodwill will have a value and form part of your estate on which your heirs may have to pay taxes. Your solicitor, your accountant and your financial adviser can all help you in mitigating tax and there are certain exemptions that benefit the small businessman.
What you should have a good idea of is the succession on your death - there is very little point in leaving your business to your son if he is not interested in it. It may be that your manager would be delighted to buy it and perhaps an option might be included in your will for him to buy the business at an agreed valuation - that is one of many possibilities which you should take advice on if you have not already done so.
It may well be essential that the business continues to produce an income for your surviving spouse and your professional advisers can certainly give you guidance, but really it is something for you to think through and discuss with your business partners, managers and shareholders. Your advisers working as a team should be able to point ways of saving inheritance tax, ensuring that the business passes to your family intact as far as possible whilst setting up a machinery probably backed by insurance whereby your surviving partners can purchase your share. None of us like to think what is going to happen to our business if we are suddenly called to the big market in the sky, but we do owe it to our heirs and partners.
Will inheritance tax have to be paid?
You may leave everything to your spouse and no tax will be payable (provided the spouse is domiciled in England and Wales). You may also leave the first £275,000 of your estate to your children or other relatives. The estate has to be fairly substantial to take part of both exemptions. This is a complicated area and your accountant and your solicitor can help and may suggest setting up a discretionary trust in your will. Don't forget the lifetime annual gifts and you could always leave your estate to charity!
Do I need a solicitor to make a will?
Not strictly, but the pitfalls in making your own will are many. The requirements of the Wills Act 1837 are very exact and you have to make certain that the formal requirements of the will are followed. Surely for your peace of mind it is worth consulting a solicitor? Also the language has to be precise. You do not want to fall into the trap of the testator who left everything to Mum when he meant his wife, but in fact his estate went to his elderly mother.
How long will it take to make a will?
In fact most wills are fairly straight forward, and your solicitor will want to know something about you. If you have a business, you may wish to discuss the business with your accountant, but even so, a will can be drawn up very quickly and usually very cheaply.
I have done my will, is there anything else I need to be concerned with?
Yes. Think about it and look at it every year. All our lives change, you may win the lottery, you may be made redundant, you may have more children or your partner may leave you. Again you will be surprised how easily most of these changes can be dealt with by your solicitor.
Please note that this article gives general advice. For specific instances seek professional help.
Michael Bingold is a partner in the law firm Messrs Read & Rogers.
