Making a will is one of the most important things you can do. It protects your family and loved ones from having to make difficult financial decisions after your death. Making a will provides lots of benefits from ensuring your wishes are carried out in relation to your estate to helping minimise the amount of inheritance tax paid to the government.
Yet, the majority of adults in the UK don’t have a will. According to a 2013 study by the independent financial advice business Unbiased.co.uk, nearly 60% of UK adults have not got around to making a will. The same study found that of those adults who had written a will, nearly three-quarters hadn’t reviewed it within the previous ten years.
Not making a will can mean that property and money is handed over to the government after your death, rather than going to loved ones. In 2014, the Law Society found that around £8m in property was needlessly being given over to the government because the owner died without a will.
Many people understandably put off making a will, believing it to be expensive and difficult. A study by the Foresters Friendly Society found that of those adults who hadn’t made a will, nearly a quarter felt that they were too poor to make a will. Yet writing a will is affordable and may even be free. There are free will writing services and free will templates online or you could use one of the many charities that offer free will writing services.
Benefits of making a will
There are lots of benefits to making a will. With an up-to-date will, relatives and loved ones have an easier task of getting access to the assets you have left them. It makes executing your wishes easier and avoids your estate – the money and assets you leave behind – defaulting to being divided up among beneficiaries along strictly legal lines.
Have a will means you can ensure assets are divided to minimise inheritance tax. Inheritance is currently tax-free up to £325,000 and tax-free on property up to £1m that is the main residence of the family. A will is vital if you have dependents, such as children, as you can determine who raises any children under the age of 18. A will can also avoid your estate going to someone you don’t want to benefit. For example, if you are separated but not yet divorced, your ex-partner may have a claim on your estate if you haven’t made a will.
If you’re wondering what is probate and when is probate required, read our expert guide to probate.
How to make a will
The good news is that making a will is fairly straightforward. You need to figure out the value of your estate ie what all your assets, such as your home or savings, are worth minus any debts such as loans. You’ll need to decide how your assets should be divided or distributed to friends and family. To ensure your wishes are carried out, you’ll also need to appoint someone to take care of executing the will.
Valuing your assets
Take time to go through all the things you own – from physical items such as cars, to savings and investments. Draw up a list or use a spreadsheet. Typical assets you should include when making a will include your home, savings and investments, pension funds, cars and motorcycles, jewellery, antiques and large or expensive household items. Make sure to include insurance policies that pay out on death, such as funeral plans and life insurance.
For expensive items – such as property, jewellery and art – it is worth getting a professional valuation. You can use online tools to see how much your home would be worth.
From the total value of your estate, subtract current debts including loans, mortgages and outstanding credit card balances. If you have equity release, subject the amount your estate needs to pay back as well.
The resulting balance is the value of your estate.
How to divide your estate
There is no right or wrong way to divide up your estate. A will is a reflection of your wishes, and while some choices can help reduce inheritance tax burdens, how you distribute your estate is entirely your choice.
Decide who you want to benefit and what they should get. It’s worth detailing any specific bequests to people or items you’d want people to have. If you have children under 18, then you’ll need to be clear who will look after them and take parental responsibility. Similarly, with pets, you’ll need to decide how they will be rehoused.
Decide too what will after your death if you’re the sole director of a small business. Without a will detailing what should happen, the business may stop operating and being unable to make payments, such as staff salaries.
For each beneficiary, you’ll also need to be clear what will happen if they were to die before you and how their portion of your estate would be reallocated. You can list any gifts or bequests to charities or other organisations at this point.
Choosing an executor for your will
Choosing an executor for your will is important. It’s a responsible task, and the person you appoint will be responsible for winding up your affairs, liaising with banks and organisations, arranging probate and ensuring your wishes are carried out. Choose your executor carefully, and if possible have a discussion with them beforehand to get their agreement.
Anyone aged 18 or above can be an executor and they can be a beneficiary in your will. You can have up to four executors but two are a good idea in case one of them dies before you do. In most cases, people choose a trusted family member or friend to be their executor, but you can use a solicitor.
Think twice if the service you’re using to write your will insists you choose them as the executor. Often banks, charities and will writing services will automatically offer you the ‘service’ of being the executor for your will. This can ultimately be extremely costly when they execute your will. Some organisations expect a payment equal to 5% or more of your total estate for executing your will, which could mean a fee of thousands.
Making a will
When you’re ready to make a will, there are many services to choose from. The more professional the advice, and the more complex your estate, the more expensive it can be to have a will written. It is possible to write a will yourself, especially if your estate isn’t complicated, but it will still need to be properly written and witnessed to be valid.
There are several ways to have a will written:
Solicitors – most high street solicitors offer will-writing services, and some expert lawyers specialise in wills. Expect to pay a few hundred pounds for a will written by a solicitor. When choosing a solicitor to make a will, check that they’re regulated by the Law Society or the Solicitors Regulation Authority. Use recommendations and reviews to help you pick a solicitor that’s right for you.
Professional will writers – Writing a will isn’t a legally regulated service. That means anyone can set up shop as a will writer, even if they aren’t a trained solicitor. Professional will writers can be cheaper than solicitors, and have lots of experience, but quality can vary. Choose a will writer who is a member of the Institute of Professional Willwriters.
Banks – Many high street banks and financial institutions offer will-writing services. These can be as an incentive to buy life insurance, for example, or as a service to wealthier clients. Be careful, as banks can be expensive or have unfriendly terms and conditions, such as writing themselves into the will as the executor along with high fees when the will is executed.
Charities – Some charitable organisations offer will writing, either for free or in return for a donation. The optional donation can be either at the point of the will being written or can be included within the will itself as a bequest. If budgets are tight, charities do offer a good service for free (donations are optional). Look out for Free Will Month and check out Will Aid for some useful free will-writing advice.
Writing a will yourself – You can write your own will and there are will packs you can buy or cheap online will writing services you can use to help you. However, you do need to ensure the will you make is recognised as a legal document. This means your will has to be witnessed by two independent people who are not beneficiaries, and they will need to witness you signing the will and also sign it themselves. All three people need to be together in the same room for this to happen. You should also state that the will you have made revokes all previous wills, including a statement to this effect at the beginning of the will.
Learn about contentious probate – contesting a will including costs and getting advice.
After you have made your will
Having a will gives peace of mind but you need to ensure it is safely stored and that your executor can access it in the event of your death. Solicitors, banks and some online services can store a will for you, as will the London Probate Service.
Make sure that you review your will every five years, or when you have a change of circumstances such as getting divorced, married, moving home or having children. For major changes, make a new will, ensuring you burn or tear up the old will.