Wills- Guides



Why make a Will?:

"The reason to make a Will is to control how your estate is divided. But it isn't just about money. Your Will is also the document in which you appoint guardians to look after your children or your dependents. The place to start is to look at what happens if you don't make a valid will (in legal terminology, if you die intestate). 

The law divides your relatives into classes such as children, siblings, grandparents, and so on. All members of any class inherit in equal shares.

Once even one person has been identified in a class, then all lower priority classes are excluded. Your assets are divided among however many or few members there are of the priority class. There is an exception to this for close family as you will see below.

If a member of a class dies before you and leaves issue (children or grand children) who survive you, the issue inherit equally between them the share that their parent would have inherited had he survived you.

If anyone entitled to inherit is under the age of 18, then the inheritance is held in trust for them until they either reach the age of 18 or marry under that age.

If your spouse does not survive you by 28 days your estate is distributed as if he or she had not survived you." 

Netlawman- Guide


Terms in a Will: making sense of the words: 

"The person who carries out the testator's wishes is an executor.
A person to whom a gift is left is a beneficiary.
A person who manages a trust set up for a beneficiary is a trustee." 

Netlawman- Guide


Mirror Wills and Mutual Wills: 

"Mirror Wills are very different animals from mutual Wills. The only feature they have in common is that two people are considering the words, not one person. It is possible in theory to create two wills in a single document but this would cause untold complications that we shall not discuss here.

Mirror Wills have been promoted over the last 50 or more years because they provide a respectable and professional way to offer “two for the price of one” without sounding like a supermarket offer.

It takes very little time to edit a draft Will to provide a second one for the other spouse or partner. (From here we will refer to all states of marriage and living together as “partners”). So the draftsman doubles his profit and the client has a bargain. 

A mutual Will is one where both partners contractually agree to the terms of their Wills. What they agree to may in fact be mirror Wills, or they may be quite different.

In most cases one of the partners has some need for certainty and the other of them agrees to go along with the proposals. It has been rare for two people both to have a requirement for mutual wills.

The essence of mutual Wills are that each will is a two-in-one document. It is a Wwill and it is also a contract not to change that Will.

Although very few mutual Wills are made each year, they are the subject matter of a disproportionately large number of legal cases that end up before a judge."  

Netlawman- Guide


Which Will? Where to start when making a Will: 

"Before selecting the right template, you'll need to have a rough idea as to:

  • whether the value of your estate will exceed the inheritance tax threshold
  • whom you want to leave specific gifts of money and possessions
  • whom you want to leave the remainder of the estate after specific gifts

Netlawman-Guide 


Sorting the structure of your Will: 

"Making a Will is rather like assembling flat-pack furniture, in that it looks impossibly difficult at the start, but when you have identified all the pieces, everything fits into place.

This guide will hopefully help you put together the framework (without the difficult to understand pictures that always come in the instructions for flat-pack furniture), so that when you use a template containing the legal wording, the whole document slots together with both the legal and practical effect." 

Netlawman- Guide


What can I leave in my Will?: 

"The following is a summary of what you may leave to your beneficiaries.

  • All your moveable possessions situated in the UK. These would include possessions like your car, jewellery, furniture, paintings, and stamp collections.
  • All real property (land and buildings) located in the UK. If you own property in the UK as a joint tenant (as most married couples and civil partners do), then your half share passes automatically on your death to your co-owner. You have no choice in the matter. If you own property as 'tenants in common', then you can control who receives that share.
  • Note that the value of your share (whether you hold it as joint tenants or tenants in common) will be included in the valuation of your estate for the purposes of inheritance tax, unless one of the exemptions applies.
  • Your business. (We have a separate article on passing on ownership of your business after your death that you might like to read.)
  • Possibly, your foreign property located outside the UK. This question has to be resolved by the law of the country in which that property is located. If the property is moveable, you or your heirs might decide to bring it back to the UK.
  • In practice, it is sensible to check the validity of any UK-written Will to dispose of any asset of high value outside the EU or what you might call 'Western' countries. Note: this is a different issue from taking out a grant of probate on your estate, where a local grant will almost always be necessary. But as long as your will has been prepared properly, your executors will have the power to deal and you can leave that to them.
  • Intangible assets such as financial instruments, shares, and bonds, and
  • Intellectual property such as domain names, patents, copyrights, rights to sue for damages and rights under contracts.
  • Self administered pension plans (SIPPS) and other pension schemes. Great care is needed here because your pensions could well be your most valuable asset. The care is needed by you in planning and later by your executors to make sure the trustees of any pension or pension policy are aware of any claim your executors might make. What they can claim depends entirely on the rules of the particular scheme." 

Netlawman- Guide


Providing for your children in your Will: 

"You do not have to leave any property to your relatives, let alone equally among any class of relatives such as your children. But the important Inheritance (Provision for Family and Dependants) Act 1975 provides that certain people can apply to the court to claim a share (or larger share than you gave) of your estate. These people are:

  • your former wife or former husband or civil partner who has not remarried
  • a different-sex partner who has been cohabiting with you for two years immediately prior to your death
  • your children
  • any person who you treated as a child of your marriage
  • anyone who considers that he was dependent on you immediately before your death

What a court will decide is reasonable inheritance depends upon all the circumstances of the individual case.

If you feel there may be conflict between your beneficiaries, it is very useful to place with your Will a statement (called a letter of intent) as to how you have reached your decisions.

Such a statement does not of itself defeat a claim, but may well have that effect in enabling your executors to provides reasons for your decisions whether or not a claim comes to court." 

Netlawman- Guide


Leaving your business in your Will: 

"Every self employed person has agonised over the question of what would happen to his or her business if he or she should die.

Whatever your age or stage in life, it is certain to be a worry. The question is as relevant to a 30 year old entrepreneur with two children and a hefty mortgage as it is to someone in his or her sixties who has begun to consider who will take it over. This article addresses some of the possibilities." 

Netlawman- Guide


Keeping an inheritance in the family: 

"Usually the reason for writing a Will is to ensure that your money and assets are passed on to the people that you want to benefit - usually relatives by blood and their families.

The law relating to Wills was enacted a long time ago, and doesn't take into account modern family situations. While it is relatively easy to make sure wealth is kept in the family, you should be aware of certain things." 

Netlawman- Guide


Life interests, debts and taxes: 

"A life interest is exactly that, a beneficial interest during a lifetime, but not ownership.

To create a life interest, property is transferred to trustees who hold it according to the instructions contained in the trust deed (in this case, your will) during the life of the beneficiary.

Your will also says what you want to happen after the life beneficiary dies. That later gift is called a gift over and the people who receive it are known as the remaindermen." 

Netlawman- Guide


Choosing executors, trustees and guardians: 

Netlawman- Guide

 

The effect of marriage and divorce on your Will:

"When you marry, any existing Will is automatically revoked (cancelled) and becomes no longer valid.

If you do not make a new one, then when you die the law of intestacy decides how your assets are divided. Usually, your entire estate would go to your wife, husband or civil partner.

This may not be what you want for a number of reasons. So we suggest that you either make a Will as soon as you marry, or beforehand - in anticipation.

If it is quite clear that you intend your new Will to take effect after you have married, then it will be valid once you are. To make it clear, you need to include the words 'in anticipation of marriage to [name]' or alternatively 'in contemplation of marriage to [name]'. 

If your marriage is ended by a court order (like divorce or annulment) your will is not void or invalid. What happens is that any gift to your former spouse takes effect as if he or she had died on the date your decree became absolute.

That usually means the gift falls back into residue for the benefit of the residuary beneficiaries. Of course, if you had left everything to him or her, then the effect is as if you had died intestate and the rules of intestacy once again decide how your estate is distributed.

Similarly, if by your will you had appointed your spouse as an executor or trustee, the will still takes effect as if he or she had died on the date the decree became absolute.

Even if you had appointed him or her as trustee of a trust for the benefit of the children of both of you, or as a guardian of a child or children, the trust fails. That might not be what you want - although you are divorced, you may still like your ex-husband or ex-wife to be responsible for any children's trust fund.

So it is best to make a new will immediately after your divorce, especially if your spouse or civil partner was a beneficiary or a trustee.

However, because your will does not become invalid at divorce, you can make a new will at any time after separation but before divorce so that these issues do not occur. You do not have to await the decree absolute."  

Netlawman- Guide


How to sign a Will:  

"Signing your Will is not rocket science. But you do have to get it right.

A Will was one of the very first legal documents. Kings and emperors were the first people to be concerned about who took over the spoils. Over a long time, systems and procedures have been refined. But today, the issues are the same as they were centuries ago.

When we make a Will, the most important worry is “Will they do what I want?”. So our legal system has evolved where you get one chance, in one document, to say what happens after you are gone. Of course you can put the word about and you can write letters to people and you can leave notes. But that would only cause confusion, conflict and discontent. So the law says it will treat just one document as your final instructions: the latest version of your Will. So that document becomes very important indeed.

So that everyone can be sure they are relying on the right document, simple rules have evolved for witnessing your intention. They are not proof against fraud. They do not totally prevent misunderstandings. But they do help everyone to be happy that regardless of whatever you write in your Will, at least they are looking at the right document.

The process of signing a Will and having witnesses confirm that they have seen you sign is called attestation." 

Netlawman- Guide


Revoking a Will: 

"A Will is revoked by a later Will only to the extent that new provisions are inconsistent with it. But any confusion could motivate a 'losing' beneficiary to challenge your latest Will. This is a litigation minefield. So it is wise always to state that your new Will revokes all earlier ones. In practice, if your executors believe they have your latest Will, they are unlikely to hunt around for an earlier one which may complicate your estate.

The basic law applies no matter what you have done with your old Will or where it is stored. If you have made a more recent Will (and signed it in the presence of witnesses), the old one is no longer valid." 

Netlawman- Guide


Keeping your Will safe - where to store it: 

"Your Will is one of your most important documents. After writing it, you need to make sure you keep it in a safe place where your executors (but no-one else) can find it when they need it.

If your Will is damaged or if your executors can’t find it after your death, then your wishes might not be followed and the people that you want to inherit your possessions and money might not do so.

There is no legal requirement as to where you must register, deposit or store your will, but some places are better than others.

Wherever you decide to keep it, tell your executors where it is so that they can find it quickly after your death. Remind them every few years." 

Netlawman- Guide


Will trusts: 

"A trust is an arrangement whereby one or more people (known as the trustees) hold property for the benefit of one or more other people (known as the beneficiaries). When the property is money or a collection of assets, it is usually referred to as a trust fund.

You can read in detail about trusts.

Trust powers are what you say your trustees can do or must do. Powers can be as wide ranging or as narrow as you want, but be careful to make sure that what you ask can be done. If it turns out that the trustees cannot do as you ask, then they may have no alternative than to ask a judge, and spend trust money on legal fees.

Trusts are used for many purposes.

If you fail to provide for a trust when the law says you must have one, the Court will set it up for you - possibly entirely against what your wishes might be.

This happens most commonly where a Will maker (known as the testator) fails to provide a trust for his or her children under 18. In this scenario, the Court appoints trustees. The powers they are given are, by default, tightly circumscribed by the Trustee Act 2000. The trustees have no alternative than to hold the property for the child or children until his or their 18th birthdays. So if you have any child beneficiaries (or could have), then you should appoint trustees and their powers yourself in your Will."

Netlawman- Guide


Trustees: their role and powers: 

"A trustee is someone who is given legal responsibility to hold property in the best interest of or for the benefit of someone else. As the name implies the trustee acts under a trust to do what is best and to act in the interests of others (the beneficiaries) and not himself. The Law has always categorised the relationship of a trustee to a beneficiary as being one of utmost good faith." 

Netlawman- Guide


Contesting a Will: 

"A Deed of Variation changes the terms set out by the testator in his Will. Whatever its date, the variation takes effect from the date of death.

There are a number of reasons why your beneficiaries might want to use a Deed of Variation:

  • to avoid increasing the size of your own estate and instead skip a generation and leave the money to your child or grandchild.
  • specifically to benefit someone who needs the money more than you do.
  • to add your gift to a discretionary trust set up by the deceased.
  • to defer and maybe avoid inheritance tax (unofficially). If your children decide to transfer their inheritance to your wife (their mother), she might make gifts to them of sums of the same order of size. If that is a contractual arrangement, the whole transaction is void. But if it is co-incidental that she gives her money to her children, that is not taxable in her lifetime. If she lives for seven years it is not taxable on her death either.
  • to favour one beneficiary or disfavour another, for example if one has suffered an injury which prevents work or another has won the lottery.
  • to transfer family business interests from a beneficiary who will not qualify for entrepreneurial relief on ultimate sale to one who will, thereby saving the difference in the rates of CGT charged.
  • Stamp Duty Land Tax (SDLT) is not payable on a transfer arising from a deed of variation or family arrangement, provided an appropriate certificate is given in the deed."  

Netlawman- Guide


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