Why you should make a will
According to the Law Society, 73% of 16-54 year olds do not have a will. Whilst this may be understandable (but not recommended), on the other hand 64% of those over age 55 have made their final wishes clear in a will.
So, what’s the reason? Do people understand the implications of dying without having made a will (being ‘intestate’)? Do they think making a will doesn’t concern them as they are young?
Whatever the answer, there are a number of reasons why you should make a will and here are some of those.
1. Make sure the right people benefit from your estate
It appears that many people believe that should they die without making a will their assets will just pass to their family. But that is not necessarily the case.
Changes to the intestacy rules as of 1 October 2014, mean that in cases where someone is survived by a spouse but no children, the surviving spouse will benefit from the entire estate.
While this may achieve the desired outcome in many cases, what if you would like your extended family to benefit from certain assets? The only way to ensure your personal belongings and other assets are given to your chosen beneficiaries is to make provision for this via your will.
2. Tax efficiency
Increases in property prices means that more people are drawn into the inheritance tax net and this number is continuing to rise.
With house prices rising, but the entry limit for inheritance tax frozen at £325,000 until 5 April 18, you should consider your inheritance position and ensure that you have a will drafted in a tax efficient way.
It is also advisable to review your will regularly, for example every five years, to take account of such changes in the law as well as cater for any changes in your personal circumstances.
3. You can choose your executors
It is important to choose people you can trust to act as your executors as they will be responsible for sorting out your affairs and paying any taxes due.
4. You can choose legal guardians
If you have any children under age 18, you may wish to consider who will look after them if you die, until they are able to look after themselves.
In addition, you may also wish to think about whether you need to make any financial provision for your children. The will can be used to stipulate how any assets should be invested and you can state when you would like the children to benefit.
5. A will can deal with complex family relationships
Changes in modern society have given rise to more complex family situations – more people have children out of wedlock and divorce rates in the UK have risen substantially. In these cases, it is essential to include the necessary provisions in your will so that you can say which certain people should benefit and in what circumstances.
Even if you do not have a potential inheritance tax problem, making a will is a very good idea. It is the first step in ‘estate planning’ and should be done before you consider making gifts and setting up trusts.
For more help and advice please do not hesitate to contact us @HoskinFinancial
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