What is a Will?

10th March 2010
What is a Will? image

What is a Will?

WHAT IS A WILL?

A will is a formal document setting out your wishes as to what is to happen to your assets after you die and appointing people called Executors who put those wishes into effect

WHY MAKE A WILL?

Virtually every adult should make a will for the following reasons: –

  • You state who is to receive what when you die. If you do not there are rules as to who will inherit your assets and those people may well not be the people you would chose
  • This is particularly important if you and your partner are not married, if you have step children, if you have no children, if you do not have close relatives, if you no longer live with your spouse/partner, or if you do have close relatives you do not get on with
  • You can make gifts to friends and/or charities
  • You can state when beneficiaries (especially children) are to inherit. If you do not they would be able to take assets on reaching eighteen years which many consider too young
  • You appoint the Executors
  • You can appoint Guardians for your infant children
  • You can make sure dependants such as disabled children are looked after financially
  • You can arrange the gifts in a tax efficient way.
  • You can make sure that those the law says you must provide for (people who are financially dependent on you) are provide for thus avoiding expensive litigation when you die
  • If appropriate you can provide for assets to be held in trust so that for example someone has the income during his/her lifetime but stipulating who will get the assets when he/she dies.
  • You can state whether you wish to be buried or cremated

 

YOU STATE WHO IS TO RECEIVE WHAT WHEN YOU DIE

If you die without a will the law imposes rules (called the Intestacy Rules) stating how much each of your relatives will receive. Everything you have is turned into cash and that is divided out. A surviving spouse or civil partner and children are normally the main beneficiaries with some of the assets probably being held on trusts which can be expensive.

By making a will you can leave what you like to whom you like. For example

  • If you and your partner are not married your partner will receive nothing under the Intestacy Rules
  • You can leave gifts to friends and/or relatives who would not receive anything under the Intestacy Rules
  • You can leave money to Charities if you wish
  • You can leave specific assets to specific people. This can be very important if you own a house or land or an interest in a business.
  • It is up to you to decide how much goes to whom. You can leave more to your spouse/partner than he/she would get under the Intestacy Rules; you can give different children different shares if that is what you want
  • You can leave assets to be held on trust. This can become complicated but can be useful if you have an incapacitated child; feel a beneficiary will waste what he/she receives or sometimes for tax reasons.
  • You can provide that a beneficiary will not receive what you wish to give them until a specified age. Under the Intestacy Rules the age is eighteen. Many people feel that is far too young to receive substantial sums of money.
  • If you wish someone to receive a specific article – such as a piece of jewellery from you – you can do so.
  • You can provide that an asset will go to one beneficiary but require him/her to pay a sum of money to another beneficiary to even matters up

The only restriction is that the law requires you to make reasonable provision for your dependants. In the vast majority of cases that is exactly what is done but sometimes that does not fit with people’s wishes. This is a complicated area of law which in the vast majority of wills is not an issue but we can guide you through this if necessary.

When making a will you need to decide if you want to leave a specific item to a beneficiary; a specific sum of money (called a legacy) or a share in the whole (called a residuary gift). It is most common to want to leave legacies to friends and/or Charities and residuary gifts to spouse/partner and or children. Many grandparents want to leave legacies to grandchildren.

In many cases much of the above may not be relevant to you. You do not have to finalise you wishes before you come to see us. Part of the process is to discuss matters with you so that you can decide what suits you. You may however wish to use the basic information sheet to help you decide what you want to do. Writing down a few ideas often helps but if you do not wish to do so that is no problem.

EXECUTORS, TRUSTEES and GUARDIANS

The “Executors” are the people you appoint in your will do make sure that what you want is what is done. They collect in your assets, pay any debts you may have and distribute your assets as you stipulate.

The “Trustees” are the people who will look after any assets you leave in trust on behalf of the beneficiaries and are often – but not always – the same people as you appoint as your Executors.

It is perfectly alright to appoint as Executors people who will also be beneficiaries. For example it is common to appoint your spouse/partner and children Executors and divide your assets between them.

In some cases where matters are more complicated or children are too young you may appoint friends or other relatives.

It is vital that the persons you appoint are people you trust and know to be honest. It is also sensible if they are younger than you!

If you have no one suitable to appoint do not worry as we can if necessary provide someone to do it for you.

The “Guardians” are the people you appoint to look after the welfare of any infant child you may leave if both you and your spouse/partners dies. If you do not that responsibility will pass to the local Social Services who will try their best but may well no do what you would want to have been done.

In many ways this is the most important role under any will. A Guardian should be someone you know very well, someone you would be happy to leave your children with and who will bring up your children as you would have done yourself. If you have strong religious beliefs you may want to choose someone with the same views.

Many people immediately think of using their parents as Guardians but do remember they are older that you and have been through having teenagers once before!

A Guardian can also be an executor.

USE OF TRUSTS

In the vast majority of cases Trusts are not relevant. However in some situations they may be desirable or even necessary

  • If the person you want to benefit cannot look after his/her own money. This may be incapacitated children or even a spouse/partner suffering from dementia
  • If you would leave young children if you died suddenly
  • If you are not sure who should receive what. For example you run a business but it is too early to know which of your children will come into that business
  • If you want someone to have the income but make sure the capital on his/her death goes to whom you wish it to go to. This is sometimes the case with second marriages
  • If there are tax reasons for using trusts

In all of these cases the assets are transferred to the names of the Trustees and they manage them in the interests of the beneficiaries.

The income may go to one person as of right or the trustees may have a discretion as to how much they pay to whom. Similarly the capital may go to a named individual(s) of the Trustees may have discretion as to how much they pay to whom.

Trustees to have to abide by many rules which is why the choice of Trustees is so important. If you want them to have discretion as to who will get what you really have to be very careful in that choice.

This does mean that there is an administrative cost – such as filing tax returns and keeping accounts – to using trust funds which is the main reason why they are not right for most people.

Use of a trust fund is a big step and needs to be thought about very carefully. If you think your circumstances are right for the use of a trust fund we will discuss the situation in detail with you; explain in more detail what a trust entails, the different types of trust and help you come to the best decision for you and your beneficiaries.

TAX PLANNING

There are four important points to remember

  1. Tax planning is not the main purpose of a will – that is to provide for your family – it can however affect the way you do things
  2. You do not have to be rich to make tax savings
  3. Whenever you do tax planning you must look at all relevant taxes
  4. Remember tax laws do change. Wills that have an element of tax planning in them need reviewing frequently to make sure they are in line with changes in taxation.

The main tax that is relevant when making a will is Inheritance Tax. Like all taxes it is complicated but many people have insufficient assets to come into charge to Inheritance Tax. The first £325,000.00 (known as the nil rate band) for each person is free of tax and a married couple or civil partners can now provide that any part of the nil rate band unused on the first death is transferred to the surviving spouse/partner.

Additionally some assets such as farmland and many business assets are either given 100% or 50% relief.

The rules are complicated and it is easy to fall into some well known traps so if you think Inheritance Tax may apply to you please contact us to discuss it. There are frequently things that can be done – not necessarily in your will itself – to improve the situation.

Income Tax, Capital Gains Tax, Stamp Duties and sometimes even Corporation Tax may be relevant – especially if you are thinking of using trusts and you will need expert help which we can provide to understand what is involved and what the best course of action for you will be. If you have an accountant we will if you wish – and we would recommend it – work closely with him/her to make sure what is done is best overall.

We will also make sure that we do not let tax planning get in the way of making sensible provision for your family.

HOW DO I MAKE A WILL?

Making a will does not have to be complicated or expensive. You simply need to telephone us on 01775 722261 and make an appointment. It may assist if you complete a Wills Information Sheet.  Please click on this link for details.

If you are married or have a partner in most cases we recommend that you both make wills at the same time.

To arrange an appointment simply ring us on 01775 722261 or email jane.mawer@maplessolicitors.com or jamie.dobbs@maplessolicitors.com or faye.blair@maplessolicitors.com or write to us at 23 New Road, Spalding, Lincolnshire PE11 1DH


Maples supporting Macmillan Coffee Morning image

Maples supporting Macmillan Coffee Morning

On 29th September 2017 Maples Solicitors LLP will be hosting a coffee morning as part of Macmillan’s “World’s Biggest Coffee Morning”.

Tea, coffee and cakes will be served from 10:00am until 1:00pm and all donations received will go to Macmillan Cancer Support to assist them with providing medical, emotional, practical and financial support to those facing cancer and their families.

At the same time, Maples will also be running a free Wills, Lasting Powers of Attorney and Probate clinic so that whilst you are in the office you may take the opportunity to discuss any of these with one of the Private Client Team with no obligation to commit. You can use the time to raise any questions you may have about making a Will, who you could appoint as Executors, whether you need a Power of Attorney or how a Power of Attorney works, for example.

Maples hope to see their existing clients join them for the coffee morning and very much look forward to meeting new people- everyone is welcome!

If you would like to discuss any matters in relation to Wills, Lasting Powers of Attorney or any Probate related matters prior to the coffee morning then please contact one of the lawyers in our private client team:-

Jane Mawer- jane.mawer@maplessolicitors.com
Jamie Dobbs- jamie.dobbs@maplessolicitors.com
Faye Blair- faye.blair@maplessolcitors.com

Or telephone the office on 01775 722261 and ask to speak with one of the team.

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