How to write a Will
Writing a Will is one of the most important actions you can take to protect your financial wealth, as it may help you to think about your inheritance tax and determine which beneficiaries take on your financial legacy.
What is a Will?
A Will is a legal document that helps to distribute your money, property, and possessions after your death. You need to have your Will formally witnessed and signed to make it legal.
When do you need to write a Will?
You are never too young to write a Will, and as you get older you should make it a priority.
This is because even at a young age you could find that your wealth surpasses the inheritance tax threshold. If your estate is worth beyond £325,000 you may be liable to the Inheritance tax which is currently 40% of your any wealth over £325,000.
A Will can help to focus your mind on your financial legacy and distribute your wealth according to your wishes.
In addition to your Will, you should also prepare an Expression of Wish to your Pension. This indicates to your Pension provider your wish for how you want your Pension benefits distributed if you die. This is important, as Pensions do not form part of your estate, a Pension isn’t subject to inheritance tax. Letting your Pension provider know your expression of wish is important, it allows your beneficiary to inherit your Pension in a way that is tax efficient to your wealth and financial legacy.
What should your Will include?
Use your Will to set out who you would like to benefit from your Will, this person is known as your beneficiary. Your Will is also used to state who would look after any children you have under the age of 18.
You’ll name an executor as part of your Will, this is the person who is going to sort out your estate and carry our your wishes after your death.
You may also wish to include a charity in your Will, and this can be a tax efficient way to potentially pay less inheritance tax.
How to prepare your Will
Start by drawing up a list of your assets and debts, ascertaining what your estate is worth and how this will be left behind for the next generation.
Think about who you want your beneficiaries to be, specific gifts to particular people, and what would happen if any of your beneficiaries died before you.
Pick your executor carefully, this is a role with a lot of responsibility.
For the actual writing of your Will it may be a good idea to seek out a legal professional such as a lawyer. Charities and banks, as well as professional Will writers may also offer such a service, or you can write your own Will. It could be important to consider that a professional and accredited legal professional could make the process less complicated after you have gone.
For your Will to be legal there are some steps you must take:
- be 18 or over
- make it voluntarily
- be of sound mind
- make it in writing
- sign it in the presence of 2 witnesses who are both over 18
- have it signed by your 2 witnesses, in your presence
You can’t leave your witnesses anything in your Will.
If you need to update or amend your Will, this is known as a codicil. You must sign and get it witnessed in the same way as a Will. For major changes, make a new Will, cancelling any previous Wills or codicils. Events such as a divorce or remarrying is a reason for making a new Will.
Your Will should be stored carefully. This could mean with a solicitor or bank.
What to do now
Speak with a financial adviser or a legal professional. They will help you think about your assets and liabilities, helping you to determine what your estate is and to think about how you would like this divided. It is important to decide upon your beneficiaries, as this will ensure your assets are distributed as you wish. It is common to choose your spouse as your main beneficiary, but have you considered naming your children as secondary beneficiaries?
For some people, gifting your children financial stability can be a part of your legacy. You may not be thinking about your children’s inheritance right now, but by getting ahead and ensuring their names are included is essential if you want them to benefit from your investments when you’re no longer here.
Prepare your Will, and also ensure you have an Expression of Wish attached to your Pension, these actions can help you do more with your money in leaving a lasting financial legacy.
If you need financial advice or would like to open an account yourself; visit www.truepotential.co.uk or call our dedicated team on 0191 625 0350
With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest. Tax examples are correct for the 2022/23 tax year at the time of publication, but tax rules can change at any time. This blog is not a personal recommendation or financial advice.Back to blog