Guide to Making a Will

It's human nature to put off doing things we don't like. Making a Will is no exception. Most of us try to look after our money and possessions and like to feel in control of this part of our life. If you want to make sure you know where your money and possessions will go after you die, you must make a Will.

Approximately 70% of the UK adult population dies "intestate". This means without making a Will. Consequently, many thoughtful and sensible adults leave it to an Act of Parliament (the Intestates' Estates Act, 1952) to dictate how their money and possessions are distributed when they die.

Often, people feel that making a Will is inviting premature death. This is just silly superstition.

In reality, making a Will means that you are taking a thoughtful, caring approach to your family and friends.

You may think that you do not have enough assets to make writing a Will worthwhile. Perhaps you are struggling with debt? If this is the case, please ring the freephone helpline 0800 138 1111.

Remember, if you have children under 18 it is still very important to write a Will so that guardians can be appointed.

If you die without making a Will, you are likely to add unnecessary work and anxiety to your family at a time when they are least able to manage sorting out your affairs. When they are struggling to come to terms with their loss, They will also be have to get involved in a legal process which they are probably not familiar with.

Making a Will can seem expensive. But remember that the legal costs of sorting out the mess and muddle after you die can be much more than the price of a properly drawn up Will.

There may also be long delays before anyone gets any of your money or possessions if a will has not been made. They may have to struggle to meet funeral and other costs from their own pocket in the meantime.

Because funerals are expensive, you may wish to consider a pre-payment plan. The National Association of Funeral Directors, Age Concern, some friendly societies and a few insurance companies all offer this service.

Solicitors understand and use terms that most of us are not trained to understand. This material tries to explain the jargon and put into everyday language the practical and legal issues of making a Will, so that those we love and care about will benefit from our money and possessions when we die.

We shall look at making a Will in four sections: 

1. What does a Will do?

2. When should you make a Will?

3. Why should you make a Will?

4. How do you make a Will?

After this, there are some hints on signing and storing a Will as well as a useful table to help you value your estate. There is also a "typical" Last Will and Testament Form to enable you to be familiar with a typical layout of a Will.

Additionally, there is a list of some important words (which are often used in Wills) and the current Inheritance Tax rates.

This material is written primarily with the United Kingdom and Republic of Ireland in mind. Please note, however, that the laws governing many of the matters discussed here may vary even within those geographical areas (for example, Scottish law differs from that in England). It is always wise to consult and be guided by your solicitor on any complicated issues.

A Will specifies where you want your money and possessions to go after your death and other personal wishes relating to children, funeral arrangements etc.

If you don't make a Will, your family has no say at all about where your money and possessions go on your death. The Intestates' Estates Act (1952) lays down the way in which all of your assets are distributed; beginning with the closest relative and moving outwards. All relatives are included. If you have no other living relatives, those who you haven't seen for years and may even have quarreled with may inherit everything when you die!

It's commonly believed that if a husband dies without leaving a Will, his wife gets everything. This is not always true. For example, if the total estate is more than the value of many houses the wife will have to share the estate with the children. This means that she would not have full control of the family budget, perhaps while the children are young and dependent on her. It may also mean that the children may inherit quite large sums of money earlier than you would have wished.

A Will is very important if you have stepchildren. There are two reasons for this: 

• Stepchildren have no automatic rights of inheritance if there is no Will, unless they have been legally adopted.
• Children of previous marriages can sometimes make claims to part of the estate of their parents, unless the Will stipulates that it is to go to the surviving husband/wife.

If you have stepchildren, it is important to seek legal advice and set out your wishes clearly in a Will.

A Will appoints an Executor. An Executor is someone who carries out the terms of the Will. Therefore, it should be someone you know and can trust.

If you don't make a Will, the law (through the Probate Court) dictates how your affairs will be dealt with and directs the appointment of an Administrator to do this. An Administrator is also appointed if the Executor you have nominated cannot or will not do the work involved when the need arises.

This means that you have no choice about who does this important job and the work may be given to someone whom you may not feel suitable.

It is normal to consider the appointment of two or more joint Executors to try to ensure that at least one of them survives you and is available when the time comes.

Various "professionals" will be prepared to act as Executor or administrator; these include solicitors, banks and some insurance companies and the Public Trustee. They can act alone or jointly with a member of your family or a close friend.

Using a professional has the advantage of using their expertise and taking the paperwork and anxiety from your family and it ensures continuity.

However, these organisations normally charge for their services and it's a good idea to check out the arrangements before appointing them.

Making a Will therefore saves time, trouble and expense.

If you have made a Will, the Executor applies for "probate" which is the document issued by the Probate Authorities giving authority for him/her to carry out the terms of the Will. This process is quite straightforward and Probate is normally granted fairly quickly.

On the other hand, if there is no Will (or the Will is not valid) the Probate Court has to appoint an Administrator and grant Letters of Administration to allow your affairs to be dealt with. This can be time-consuming and decisions have to be postponed until someone is found to act as Administrator. This often causes frustrations and can cause problems for your family.

A Will may help your family pay less Inheritance Tax

You may feel that you don't own very much. But, it may be that money you pass on to the next generation will attract Inheritance Tax. A properly drawn Will can make best use of various exemptions and relief available.

For example, if you leave virtually everything to your spouse, no Inheritance Tax has to be paid at all. However, this may mean a heavier tax burden on the family when the spouse dies and everything that remains is passed to your children or others.

Well-drawn Wills can often overcome this sort of problem.

Many people first consider making a Will at the time of major change in their lives. These include marriage, having children, when grandchildren are born, if there is a divorce or a relative or close friend dies.

Others leave it until they retire; though the majority of people never actually get around to doing anything about it.

Remember, marriage or re-marriage automatically cancels a Will you have already made.

Another time to think about making a Will is when there is significant change to your financial circumstances.

Changing jobs, an inheritance, buying a house and receiving proceeds from an insurance policy or pension are good opportunities to review who we want to benefit from our estate.

A Will sets down in writing the way in which you want your finances, property and possessions to be dealt with after your death. If no Will is made, the law of intestacy divides up your estate. The wishes of your family and friends may not be taken into consideration.

Your wife or husband may not receive their full entitlement. If the size of your estate exceeds certain limits, they will receive only part of it. If you are unmarried and without children, things can be even worse.

Time is taken to trace any relatives who may have a claim on your estate. Should you have no living relatives and want your estate to be used for a particular purpose, it is unlikely that your wishes will be fulfilled, even if known to others, simply due to a lack of a valid Will.

Unless you leave a Will, no one can be totally certain how you wanted your estate to be dealt with; consequently, this often results in long, expensive legal problems. Drawing up a Will guarantees that your wishes will be complied with.

Please note, husbands and wives should draw up separate Wills because either could die first.

In order to make a Will or alter one you have already, you are advised to consult a solicitor. You could also go to your bank, insurance company or other financial adviser who may help you make a Will or introduce you to someone who can. Many of us will have used a solicitor in the past when buying or selling a house. If not, no doubt friends may be able to recommend one they have used.

There are also various charities that give specific help in drawing up a Will. Naturally, they are hoping you might be inclined to leave them something in it so, if that is your intention, get in touch with the charity concerned.

You may be tempted to make a Will for yourself on a form bought from a stationer's, in order to save money. But there are hidden dangers and this can prove a very costly method in the long term.

A do-it-yourself Will may be unclear or, worse still; it may be legally invalid and therefore a false economy. For example, certain words such as "money" and "property" have different meanings in law to those we usually use in everyday conversation.

If used in a Will they may not convey the meaning you intend. The proper phraseology may seem like legal jargon, but it is often necessary for clarity.

A Will is one of the most important documents you may ever produce; it quite literally pays to get it right!

Drawing up a Will with a solicitor need not be very expensive.

You can ask him/her to quote a price for doing the work before starting. Several things can be done in advance of seeing your solicitor, which save time and money.

Here is a Checklist:

Information and instructions

We have produced this section to enable you to record information which will be useful to your next-of-kin and Executors in the event of your death.

This information is of a confidential nature. Remove this section of the booklet and give it to your next-of-kin or Executors for safe keeping.

This information does not constitute a Will and does not deal with how your estate will be distributed. Please make a Will to ensure that your possessions are distributed according to your wishes.

You must not include instructions concerning money or possessions - this document is not a Will.

Further information

Books & Leaflets on Making a Will

Making Your Own Will
An Action Pack from Which?

Will Information Pack
Help the Aged (0207 253 0253)

First, make a list of all your possessions and property with their current value, plus all your financial assets (investments, insurance policies, etc.).

Second, make a list of all your financial commitments set against those assets. A suggested list follows:

Value of my estate

What I have (Total A) less What I Owe (Total B) = Value of My Estate

After completing this exercise, if you find that you are in debt and would like advice on it, please ring the freephone helpline number 0800 138 1111 to speak to the Consumer Credit Counselling Service.

You should also record a list of any property that is in joint names, plus a list of any sizeable donations/gifts of money or property that you have made in the past seven years, because this may affect Inheritance Tax.

Every Will requires Executors, usually two, possibly a son or daughter or a professional such as a solicitor or bank manager.

The workload may be shared between someone who knew you personally and a neutral professional involved in ensuring your wishes are carried out. This can be quite a long task, so it is best to make certain they are willing to do it.

If one or both Executors are beneficiaries, it may well speed up the administration of the estate! Bear in mind that appointing a professional as an Executor can be quite expensive, further diminishing your estate.

If you have young children under the age of 18 years of age, think carefully how you should provide for them in your Will.

This should involve financial consideration and who will look after them when you die.

You should also name a guardian in your Will. His/her/their role is to act in the best interests of the child/children if they are left orphaned. To avoid problems later, especially after your death, ensure they know fully what is involved.

Having established what your estate is likely to be, you must now decide who you want to benefit from it. You should make a list of the names and addresses of anyone you wish to include.

Certainly it would be wise to discuss these matters in principle with your family or a close friend. Any Will you may make or have made already is automatically cancelled by marriage, including remarriage following divorce.

Remember that divorce does not nullify a Will. If you have young children, then it is wise to appoint guardians (see above) to look after their interests.

When you die, if your estate exceeds a certain amount, Inheritance Tax will be due on the excess. Gifts to your spouse or a registered charity are deducted before tax liability is calculated.

Any personal gifts that you make during the last seven years of your life may be liable to Inheritance Tax.

So keep a record of any sizeable gifts you make and mention these to your solicitor. He/she will advise you about what gifts you can make without them being liable to taxation, as well as other possible exemptions.

Different kinds of gifts

There are various ways in which you can leave money or gifts to family, friends or organisations. You should discuss these with your solicitor and choose the appropriate kind of gift. Here are the main types of gifts:

1. Pecuniary Bequest

This is a stated amount of money, which you decide to leave to a named person or organisation. Remember that inflation will gradually reduce the value of such a bequest. It is therefore advisable to revise such bequests from time to time or use percentage of estate.

2. Specific Bequest

This is a specific item that you leave to a named person. You must ensure that you fully and accurately describe the item in your will to avoid confusion later.

You should also include the full name and address of the person or persons that you wish each item to go to.

You should try to ensure that the particular item you wish to bestow on someone would be wanted and appreciate!

3. Reversionary Bequest

Should you wish to leave someone a gift, but would like another person to receive it after the death of the first recipient; this can be done by means of a reversionary bequest. For example, you could leave your house to your spouse, then to your children.

4. Residuary Bequest

Once you have selected all your Specific and Pecuniary Bequests you should then decide what should happen with the residue. The residue is everything that is left after the entire Specific and Pecuniary Bequests and all debts, liabilities and taxes have been paid.

If you do not make provision for the residue, the law of the land will decide what happens to it.

5. Trusts

A trust is a gift that trustees, whom you have appointed and named, look after for another person. For example, you can leave a house or other item for someone to use during their lifetime, after which it can pass to yet another person whom you choose. This is called a Life Interest Trust.

You may wish to set up a Discretionary Trust, where the named trustees have the right to distribute the income in a way that they judge best amongst a wide class of beneficiaries whom you have specified.

Trusts can be an extremely useful and relatively safe way to provide for someone who cannot manage his/her own affairs - for instance, a beneficiary with learning difficulties.

Care should be taken over trusts and choice of trusts. It is wise to ask your solicitor for advice to ensure that the interests of the beneficiary remain paramount after your death.

You should make sure that the trustees fully understand that their purpose is to act always in the best interests of the beneficiary, not merely to preserve the existence of the trust fund.

The rules concerning signing and witnessing a Will are very strict. Using a professional to draw up your Will enables you to get proper advice concerning signing it.

It may be helpful to list some important points:

When your solicitor prepares a draft version of your Will, you should read it carefully to clarify anything that you do not understand and to ensure that it sets out your wishes exactly. You can then agree any changes necessary.

Talk things over with your solicitor at this stage, it may well save you concern and additional costs later. Once you have agreed on the content, your solicitor will produce the final version of your Will.

If you make alterations to a Will before it is signed, you must initial them and get the witnesses to initial them too. Do not make alterations to your Will after you have signed it.

Witnesses

Two independent witnesses must sign the Will to make it legal. They cannot be beneficiaries, nor closely related to someone who is a beneficiary or they will forfeit any bequest to them in the Will.

You must sign and date the Will in the presence of two witnesses, who must each then sign it in front of you and each other.

Altering your Will can be done simply with a codicil, a legal document, witnessed in the same way as (and usually kept with) your Will.

You should never tamper with your Will or alter it in any way, other than by this method, because to do so can invalidate the whole document.

Events that make it advisable, if not essential, to change your Will include:

• The birth of another child (or grandchild). At this time you may wish to include the child in your Will, possibly appoint a guardian.
• When other beneficiaries die.
• When you simply change your mind about something.
• When you receive a significant sum of money and wish to allow for this in determining how your estate should be divided.
• When you wish to add another person - or possibly an organisation - to your Will.

Where to keep your Will

Keep your Will in a safe place. You may be able to make arrangements for your solicitor or bank to store it for you. Your Will can be deposited at the Principal Registry (Family Division) for a nominal fee.

It is also advisable to keep a copy yourself and to ensure that the Executors and possibly close relatives know where to find the original after your death.

You can store your Will at home.

If you do, it is important to remember where you have stored it and it is useful to tell family or a trusted friend; it can then be found quickly and easily when you die. Not knowing where to find your Will can cause delay and anxiety at a difficult time.

Never attach anything to your Will or codicil with pins, paper clips, staples or anything else.

It may cause problems when you die if your Will has marks on it since this may be construed as an indication that another important document was attached to it at some time and has been removed.

We hope that this material has helped you to understand Wills and the importance of writing one.

The information published in this material is given for guidance and you should check specific details about your circumstances and wishes with your solicitor, or other representative.

Our desire is that this guide has encouraged you to take action now in writing a Will.