Wills & Estate Planning

Overview

A will is a legal document that sets out what should happen to your money, property, and possessions (collectively known as your ’estate’) after you die. Estate planning goes beyond just creating a will—it’s the comprehensive process of arranging your affairs to ensure your assets are distributed according to your wishes while minimizing complications and potential tax burdens.

Key Points

• A will is essential for ensuring your wishes are followed after death
• Without a valid will, your estate will be distributed according to intestacy rules
• Wills should be reviewed regularly, especially after major life changes
• Proper estate planning can reduce stress and financial burden for your loved ones
• Professional advice is often valuable, particularly for complex estates

Making a Valid Will

Legal Requirements

For a will to be legally valid in the UK, it must meet these requirements:

1. Made voluntarily: Created without pressure from others
2. Sound mind: You must have the mental capacity to understand what you’re doing
3. Written: Oral wills are not legally recognized in the UK
4. Age requirement: You must be at least 18 years old (except for military personnel on active service)
5. Properly witnessed: Signed in the presence of two independent witnesses who also sign

What to Include in Your Will

A comprehensive will typically includes:

• Executors: People responsible for carrying out your wishes (usually 1-4 people)
• Beneficiaries: Who receives your assets and what they get
• Guardians: Who will care for your children if they are under 18
• Specific gifts: Particular items or sums of money left to individuals
• Residuary estate: What happens to everything else not specifically mentioned
• Funeral wishes: Although not legally binding, these can guide your family
• Trusts: Any trusts you wish to establish (for example, for minor children)

Types of Wills

Different situations may call for different types of wills:

• Simple will: Basic document suitable for straightforward estates
• Mirror wills: Similar wills made by couples, usually leaving everything to each other
• Trust wills: Incorporate trusts to protect assets or beneficiaries
• Living wills (Advance Decisions): Documents stating your wishes regarding medical treatment if you become unable to communicate (not the same as a standard will)

DIY vs Professional Wills

You can write your own will, but professional help is recommended when:

• Your estate is large or complex
• You have business interests
• You have overseas assets
• You have a complicated family situation (previous marriages, estranged children)
• You want to set up trusts
• You need tax planning advice

Professionally drafted wills typically cost between £150 and £600 depending on complexity, while more sophisticated estate planning may cost more.

Intestacy Rules

What Happens If You Die Without a Will

Dying without a valid will is called dying “intestate.” When this happens:

1. The law decides who inherits your estate based on fixed rules
2. These rules may not reflect your wishes
3. The process can be more time-consuming and expensive
4. Close friends, unmarried partners, and stepchildren receive nothing

Current Intestacy Rules in England and Wales

If you die without a will:

If you have a spouse/civil partner and children:

• Your spouse/civil partner receives all personal possessions, the first £322,000, and half of the remaining estate
• Your children share the other half of the remainder equally

If you have a spouse/civil partner but no children:

• Your spouse/civil partner receives everything

If you have children but no spouse/civil partner:

• Your children receive everything equally
• If a child has died before you, their children (your grandchildren) receive their share

If you have neither spouse/civil partner nor children: Assets pass in this order:

1. Parents
2. Siblings (or their children if siblings have died)
3. Half-siblings
4. Grandparents
5. Aunts and uncles
6. Half-aunts and half-uncles
7. The Crown (if no relatives exist)

Scotland and Northern Ireland have different intestacy rules.

Common Issues with Intestacy

Dying without a will can lead to significant problems:

• Unmarried partners receive nothing, regardless of relationship length
• Stepchildren aren’t included unless legally adopted
• Family disputes are more common
• Business interests may be distributed inappropriately
• No control over executors - the court appoints administrators
• Higher inheritance tax may be payable without proper planning
• No guardians named for minor children

Updating Your Will

When to Review Your Will

Your will should be reviewed regularly, especially after:

• Marriage (marriage automatically revokes previous wills unless specifically written in contemplation of marriage)
• Divorce (divorce doesn’t revoke a will but treats your ex-spouse as if they died on the date of divorce)
• Having children or grandchildren
• Death of a beneficiary or executor
• Significant changes in assets (buying property, inheritance, business changes)
• Tax law changes that might affect your estate
• Moving countries (different inheritance laws may apply)
• Every 3-5 years as a general guideline

Methods of Updating a Will

There are two main ways to update your will:

1. Write a new will that clearly revokes all previous wills (recommended for major changes)
2. Add a codicil - a legal document that amends, rather than replaces, a will (suitable for minor changes)

When updating your will, follow the same legal formalities required for making the original will. Handwritten changes on an existing will are not valid and could invalidate the entire document.

Revoking a Will

A will can be revoked by:

• Making a new will that explicitly revokes previous wills
• Physically destroying it (burning, tearing, etc.) with the intention to revoke
• Getting married or entering a civil partnership (unless the will was made in contemplation of this)

Storing Your Will

Your will should be stored safely where:

• It won’t be damaged
• It can be found easily after your death
• It cannot be tampered with

Common storage options include:

• With your solicitor (most common)
• At a bank (though banks are increasingly reducing this service)
• With the Probate Service (for a small fee)
• At home in a fireproof safe (though this carries risks of loss or damage)

Always tell your executors where your will is stored.

Estate Planning Beyond Your Will

Lasting Power of Attorney (LPA)

While a will covers what happens after death, a Lasting Power of Attorney addresses situations where you’re alive but unable to make decisions:

• Property and Financial Affairs LPA: Allows your attorney to manage your money and property
• Health and Welfare LPA: Allows your attorney to make decisions about your medical care and daily routine

Setting up LPAs is an important complement to your will, ensuring your affairs can be managed if you lose mental capacity.

Letter of Wishes

A non-legally binding document that sits alongside your will to provide guidance on:

• How specific items should be distributed
• Explanations for decisions made in your will
• Care preferences for dependents or pets
• Funeral arrangements
• Values and principles you’d like executors to consider

Inheritance Tax Planning

Effective estate planning often considers tax implications:

• Understanding available allowances and exemptions
• Lifetime gifting strategies
• Use of trusts
• Business relief options
• Charity legacies

These topics are covered in detail in the [Inheritance Tax for Individuals] section.

Digital Assets

Increasingly important to consider what happens to:

• Email accounts
• Social media profiles
• Digital photos and files
• Online financial accounts
• Digital currencies
• Subscription services

Consider creating a digital inventory and including instructions in your will or letter of wishes.

Common Questions

How much does it cost to make a will? Costs range from nothing (DIY) to several hundred pounds for professional services, depending on complexity.

Can I change my will after making it? Yes, you can change your will at any time as long as you have mental capacity.

What happens if an executor dies? If your will names substitute executors, they will take over. Otherwise, there are legal provisions for appointing replacement executors.

Can a beneficiary witness a will? Yes, but they (and their spouse/civil partner) will lose their right to inherit under that will.

Can I exclude someone from my will? Generally yes, but certain dependents may be able to challenge your will under the Inheritance (Provision for Family and Dependants) Act 1975.

Next Steps

To ensure your estate planning is effective:

1. Make an inventory of your assets, liabilities, and key contacts
2. Consider your beneficiaries and what you want them to receive
3. Choose suitable executors who are willing to take on the responsibility
4. Decide on guardians if you have minor children
5. Consult a professional if your situation is complex
6. Review regularly to keep your will up to date
7. Tell your executors where your will is stored