Traditionally, the New Year brings an opportunity for people to make new resolutions to live better and be more proactive.
These may involve participating in “dry January” and “veganuary”. People may also decide to quit smoking, lose weight, join a gym or simply de-clutter the house. But what about promising to make or update your Will?
Ten Most Common Misconceptions when Making a Will
There is a vast amount of people who tend to delay the process of making a Will for one reason or another, but those that do will experience peace of mind that decisions have been made, things are taken care of and their affairs are in order. It may not be the most appealing activity but it is probably one of the most important things that any of us should do.
False assumptions regarding what will happen to their assets on death may be a reason as to why people avoid making a Will. Below are ten of the most common misconceptions and misleading information that we come across:
- My spouse will inherit everything if I do not make a Will.
If you are married, what your spouse will inherit depends on whether there are children involved and the value of your estate.
- My personal possessions and household goods are not part of my estate for Inheritance tax.
For the purpose of inheritance tax, your estate includes your possessions (including property),and any gifts given seven years prior to your death (subject to exemptions).
- My live-in partner has no claim on my estate if I die.
Certain persons can claim against your estate when you die – these include: spouses and civil partners, an ex-spouse/civil partner who has not remarried, anyone living in the same household as the deceased during the whole two years immediately before the date of your death, and any child(ren) you have.
- My pension death benefits are dealt with by my Will.
This might not always be the case.
- My pension death benefits are not dealt with by my Will
This might not always be the case – see above! This is a complex area and something that you should look at as part of your estate planning
- Because we are divorced, my ex-spouse has no claim on my estate when I die.
As with the third point above, certain persons can claim against your estate after you die, including, in some circumstances, ex-spouses who have not remarried.
- Any foreign assets which I own are not subject to UK Inheritance tax.
Any foreign assets you own such as property, pensions, investments and savings may be subject to UK inheritance tax rules so it is important that you understand the rules.
- I can make any number of Inheritance tax free gifts if each gift is not more than £3,000.
A £3,000 gift allowance is permitted each year known as annual exemption. Therefore, a total of £3,000 per tax year may be given away as assets or cash without them being added to your estate for inheritance tax.
- Anyone can witness my Will.
A Will signing can be witnessed by anyone above the age of 18 as long as they do not benefit from it. For example, if your spouse or children are in your Will, they are unable to witness the signing.
- A person who benefits from my Will cannot be an executor.
This is untrue as anybody above the age of 18 can be an executor, including beneficiaries in a Will. It is in fact very common for a beneficiary to also be an executor.
If you have ever presumed that any of the above statements were correct then it is important that you seek reliable and qualified help. Are you possibly labouring under any other misconceptions?
Who Should You Ask for Help?
Making a valid Will that leaves your estate as you wish and is also tax efficient may be more technical and complex than you think and there are countless cases of where poorly drafted Wills have been invalidated. However, it does not have to be an arduous process.
A solicitor, who is a qualified Trust and Estate Practitioner, will have the knowledge and experience to provide the right service for your individual circumstances. A STEP qualified practitioner will not over complicate matters and will explain all the relevant issues to you in straightforward terms and make their charges clear from the start.
This year, resolve to get your Will sorted and make it one resolution that you keep. Contact our team for assistance, so even if you never actually go to the gym after purchasing that membership, you can at least start the New Year with one positive and worthwhile tick on your resolutions list!