Making or updating your will
Updating your will
It’s a good idea to review your will regularly to make sure it still meets your needs. It’s generally recommended that you look at your will every three to five years, or if your circumstances change.
If you’re reviewing your will, here are some things to think about:
Changes in your circumstances or those of the people you care about
- Have you married or divorced? Marriage generally invalidates a will, unless specific provisions were made when the will was written.
- Have new children been born, and does your will account for them?
- Have children come of age since the will was written? If so, are any instructions relating to them still relevant?
- Has anyone you originally wanted to benefit died?
- Are the people you named as your executors still willing and able to act?
Changes in financial circumstances
- Have your finances, or those of your loved ones, changed significantly?
- Has the law around inheritance or taxation changed? If so, does your will still meet your needs?
- Do you still own specific assets or items mentioned in your will such as your home, car or jewellery?
Changes to your wishes
- Do you want to include gifts to any additional individuals or charities?
- Have your thoughts on issues like funeral arrangements changed?
If you want to make a relatively simple change to your will, such as adding a gift to the National Garden Scheme or another charity, you can use a codicil (a document that can modify a will) to alter your will quickly and simply. These days many legal professionals hold wills electronically and may be able to print a new, amended copy easily.
Making a will
There are some key things you will need to think about:
- What you own
It’s a good idea to begin by thinking about what you own, and what debts you might have. If the total of what you own is likely to be more than £325,000 then your estate may be liable for Inheritance Tax, so you might wish to take this into account in your decision-making.
- The people and organisations you would like to benefit
Think about the people and organisations you would like to benefit. If you have dependent children, think about what you would want to happen to them if you were no longer around. It’s not an easy thing to think about, but it’s also sensible to consider what you would want to happen if your main beneficiaries died before you. Finally, think about the people you would like to be your executors – those whom you entrust to ensure your wishes are carried out. You can appoint private individuals, or professionals. It’s a good idea to speak to them to make sure they would be happy to act, and, in the case of professionals, what their charges are likely to be.
- Choosing someone to write your will
There are lots of different ways to write your will, from using a DIY kit or creating a will with an online service, to finding a professional will writer or using a specialist solicitor.
Although it’s possible to write your will yourself, it’s a good idea to use a professional – it’s easy to make mistakes, which could be costly in the long run.Using a solicitor tends to be the more expensive option but can be the right choice, particularly if your circumstances are a little more complex, or if you want the reassurance of working with someone whose business is regulated by law.You can find a solicitor through the Law Society. Or, if your circumstances are complex, you can find someone who is a specialist in wills and probate through the Society of Trust and Estate Practitioners. A professional will writer can often write a will at lower cost, but they are not regulated by law. If you want to use this option, it’s wise to use someone who belongs to the Institute of Professional Will Writers or the Society of Will Writers, so you can be sure they are appropriately trained and insured.
Gifts to charity and Inheritance Tax
Inheritance Tax can be charged at 40 per cent on anything you leave over the Inheritance Tax threshold of £325,000. So, in the simplest case, with an estate worth £500,000, Inheritance Tax could be charged at 40% of £175,000 (£500,000 minus £325,000).
However, there are various exemptions available: for example, when you leave assets to your spouse or pass on your home to your direct descendants. The rules around Inheritance Tax are somewhat complicated, so ask your solicitor or see the links below to find out more.
Gifts made in a will to charities like the National Garden Scheme are normally free of Inheritance Tax. In fact, leaving money to charity can reduce the amount your estate would have to pay in tax, or even eliminate it entirely. Even if your gift doesn’t take you below the Inheritance Tax threshold it can reduce your bill. Moves by the government to encourage charitable gifts in wills mean that leaving 10 per cent or more of your net estate to charity reduces the tax rate you would pay from 40 per cent to 36 per cent. If you believe your estate might be liable for Inheritance Tax, you may wish to consult a solicitor who’s a specialist in the area, via The Society of Trust and Estate Practitioners. You can find out more about Inheritance Tax at: https://www.gov.uk/inheritance-tax or https://www.moneyadviceservice.org.uk/en/articles/the-tax-benefits-of-giving-to-charity