Quick read:

A will is way of ensuring your wishes are met when you die. You can choose who carries out your instructions and gives your financial assets and personal possessions to your chosen beneficiaries. A will can also be used to reduce the amount of Inheritance Tax paid when you die. If you do not have a will in place, the law will decide what happens to your financial assets and personal possessions. 

In depth:

What is a will?

A will is a document you sign to state what happens to your financial assets and personal possessions when you die. You can also choose people to look after your children if they are under 18 when you die.

There are very strict requirements that must be met when you sign your will. If it is not signed in accordance with legal requirements it will not be valid. 

How will it help?

By creating a will, you can choose who receives your assets and possessions. You can also include methods of protecting your beneficiaries by delaying the age they inherit or by putting their share into a trust to protect against events that may cause the inheritance to be lost.

It also gives you an opportunity to set up your estate to make it as tax efficient as possible by making the most of tax exemptions.

What happens if I do not have a will?

If you do not have a will, the law will decide what happens to your estate. This is known as the rules of Intestacy. A brief summary of the rules are below.

Surviving Relatives	Who receives your estate
Spouse or civil partner only (unmarried partners are not included)	Spouse or civil partner receives all of your estate
Spouse or civil partner and issue* * Issue includes children. If one of the children dies, their share will be given to their children and so on.	Spouse or civil partner receives: – Personal possessions – £250,000 – 50% of the remaining estate  Issue receive: – 50% of the remaining estate
Issue only* * Issue includes children. If one of the children dies, their share will be given to their children and so on.	Issue receive all of the estate in equal shares.
Parents only	Parents received all of the estate in equal shares
Siblings or if they have died, their issue* * Issue includes children. If one of the children dies, their share will be given to their children and so on.	Siblings will receive all of the estate in equal shares. If they have died, their issue will receive all of the estate in equal shares

What should I consider:

The value of your estate:

Your estate consists of what is left of your financial assets and personal possessions once any debts have been paid.

For Inheritance Tax purposes, it can include gifts you have made and any trusts you have benefited from as well as your share of jointly owned assets.

Executors:

An executor is the person that carries out the instructions in your will. You need at least one executor and it is good practice to appoint no more than four people. You can also appoint a professional executor such as a solicitor. Executors cannot change your wishes and must follow the instructions in your will.

Beneficiaries:

A beneficiary is a person that will inherit from your estate. It is often assumed that a surviving spouse will inherit all of your estate if you do not leave a will but this is not always the case.

You can choose which age they inherit and whether or not you wish to protect their inheritance further through the use of trusts.

You should consider what happens if that person dies before you.

Children/guardians:

If your children are under the age of 18, you can appoint guardians to look after them until they reach the age of 18.

Protection:

It is often appropriate to protect an inheritance for a beneficiary to avoid it being lost. A straightforward way is by specifying an age at which the beneficiary should inherit. However, it can be protected further by using trusts. This is often the case when the inheritance needs to be protected against care home fees, divorcing beneficiaries or if a beneficiary is vulnerable. 

Tax:

Everyone has an amount that is free of Inheritance Tax. Everything above this amount is subject to Inheritance Tax unless an exemption applies. This must be carefully considered when making a Will as tax can dramatically reduce the amount given to your beneficiaries.