Advice from Deborah Beal, Associate Solicitor - Wills & estates at Thursfields,
who are Worcestershire-based solicitors.
Putting your affairs in order can spare family or friends painful decisions and even financial difficulties that could happen if you don't make your wishes clear. Putting your affairs in order may also clear your mind of lots of worries, leaving you free to concentrate on the present. In this article, I am going to deal with the importance of making a Will.
A Will is one of the most important documents most people ever sign yet, surprisingly, more than two-thirds of adults die without a valid Will, causing a great deal of uncertainty at a time of heartache and distress. Making a Will ensures that whatever you have - no matter how much or how little - is divided up according to your wishes. It also safeguards the security of your loved ones and enables you to choose who handles your possessions after your death by acting as your Executor(s).
Making a Will is important because:-
If you die without a valid Will, there are certain rules which dictate how your money, property or possessions will be allocated. This may not be the way that you would have wished for them to be distributed and, if you leave no next of kin, your estate will go to the Crown. Your Executors (who take charge of your estate and wind it up) will also be chosen according to fixed rules and these may not be the most suitable to act.
To avoid these problems, it is important that you make a Will. . .
By making a Will, you can:
Providing for you loved ones is the most important thing to consider when writing a Will; however, once they have been considered, you may wish to leave a gift in your Will to support the work of the Severn Valley Railway. One way of doing this is to include a residuary legacy to the Severn Valley Railway Charitable Trust.
Types of gifts you can leave in your Will:
Financial benefits of leaving a gift in your Will
Inheritance Tax (IHT) is a tax on the estate (the property, money and possessions) of someone who’s died. How much you pay depends on the value of your estate – which is valued based on your assets (cash in the bank, investments, property or business, vehicles, etc.), minus any debts. There’s normally no IHT to pay if the value of your estate is below the £325,000 threshold, or you leave everything above the £325,000 threshold to your spouse, civil partner, or a charity.
If neither of the above applies, your estate will usually be taxed at 40% on anything above the £325,000 threshold when you die, although there are other allowances and exemptions that may be available. Depending on your circumstances, if you give away your home to your children or grandchildren on your death however, your threshold can increase to up to £500,000 and, if you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.
Leaving something to charity in your will may also save your beneficiaries money. When including a charity in your will, your donation is usually taken off the value of your estate before IHT is calculated, and can reduce your IHT rate (if 10% or more of your estate is left to charity in your will, IHT will be charged at 36% of the net value of your estate).The SVR Charitable Trust strongly recommends taking legal advice on this subject if applicable to your circumstances.
Assessing your estate
Before you draft your Will, you should:
Drafting your Will
It is always best to ask a legal advisor to draft your Will. he or she will know the correct form of words and can avoid ambiguities and misunderstandings. In the meantime, these three basic rules may be helpful: