According to recent estimates, almost 60% of the people who pass away in the UK do not have a Will. While there are laws in place to handle instances where no Will exists, problems almost always arise in those cases. There are more reasons than we could possibly list to explain why you should make a Will. So we’ll focus on the top three.
1. Make A Will To Keep You In Control
Not having a Will means not having control over what happens to your estate upon your passing. Laws of Intestacy take effect when no Will is present. According to the laws of intestacy, your estate is divided out in a certain hierarchical way. For people who have challenging relationships with some family members, making a Will means being certain to have provisions for exactly the people you want to receive an inheritance. Laws of intestacy also neglect blended families. Step children or adopted children are not given the same consideration as children of full blood relation. If you have a long term partner, but are not married, they are not considered for inheritance. You are also not able to leave gifts for charities or non-relatives without a Will. Additionally, a Will provides instruction for the type of funeral you would like and lets you choose who will be in charge of executing your estate.
2. Ensure More Money Goes to Those You Love, Not Taxes
If you own your own house, and have a mortgage protection, endowment or life policy, and you are contributing to a pension, under intestacy, your estate might pay Inheritance Tax on the majority of what you leave. As of 2020-21, the Inheritance Tax (IHT) rate of 40% applies on gifts above the tax-free inheritance tax allowance of £325,000 for a single person. However, a married couple or civil partners can pass on up to £650,000 IHT free. That goes all the way up to £1m if your home is part of your estate. In essence, this doubles the amount the surviving partner can leave tax-free without the need for a specialist tax consultant. For those interested in charitable gifts or political donations upon their death, making such gifts known in your Will allows a lower IHT rate of 36% for the remainder of your estate value over what we discussed above. However, your gift must be at least 10% of the taxed estate. Further, the charity must be registered in the UK. If you choose a political donation, it must be to a party that maintains at least 2 MP’s. Be certain to see our blog post on avoiding excessive Inheritance Tax to learn more.
3. Protect Your Children or Other Dependents
Unless your spouse survives you, your children under the age of 18 will be in danger of becoming wards of the court. This means it is possible siblings will be put into separate care homes. In order to keep your minor children under the guidance of people you feel confident will raise them well, you must create a Will with legal guardianship provisions. Alternately, you may be one of the thousands of UK citizens acting as caretaker for a family member. To ensure they continue receiving quality care in the instance of your passing, establishing a trust for them is essential. In your Will, you can designate the trustees to handle distribution of finances and provide care. There are several trust options to choose from so you are able to control the level of involvement of trustees. Other reasons to write a Will include being in charge of establishing your legacy, ensuring any business you may be a part of continues in your absence, and simply keeping the peace between family members. With so many reasons to make a Will, why not contact us today to find an option that works for you?
