How To Leave a Legacy

WHY DO I NEED TO MAKE A WILL?

• To control what happens to your money and possessions after your death
  Only 1 in 3 people in the UK make a will. If you have not made a will – this is called dying intestate – the way your money is given out is governed by law. How your possessions would be given out depends on all sorts of factors including the size of your estate, whether you are married, or have any children or surviving relatives.
  
  Making a will is especially important if you have a partner to whom you are not married. You cannot assume that your next of kin will automatically get everything if you die without making a will.
  
  
• To make sure your money goes to the people and organisations you choose
  Making a will is the only way you can choose who will benefit from your possessions and property when you are gone. It means you can provide for those you care for and make sure they are looked after when you are no longer there. If you have a favourite charity you can support them so that their work can carry on into the future.
  
  
• To save on costs and taxes
  With a little careful planning, you could save your family extra costs and inheritance tax. You can also help to avoid expensive delays.
  
  
• To give your family peace of mind
  If you leave your family to sort out your affairs because you have not made a will, this will involve them in even more heartache and confusion.

HOW DO I START?

• Draw up a list of assets
  You may be surprised at how much you own. The list should include property, household contents, your car, items of value like pictures or jewellery, and financial assets which include bank accounts, insurance policies, shares, premium bonds, and any other investments. You should also draw up a list of liabilities (such as your mortgage). You can then think about how to leave your money –see the notes later on.
  
  
• Choose your executors
  Executors are the people who administer your estate and make sure your instructions are carried out after your death. You would normally choose at least 2 executors, one of whom could be your bank manager or solicitor, but they will charge your estate for the work that they do in dealing with it.
  
  
• Choosing guardians for your children
  If you have children under the age of 18 you should think about who would look after them if you and your spouse were both dead. It is a good idea to choose someone and then ask them if they are happy to accept this responsibility before you name them in your will.
  
  
• Particular requests
  Your will is your main opportunity to leave instructions as to your final requests. For example, you might want to leave details as to whether you are to be buried or cremated, as to where your ashes are scattered, details of your funeral service such as your favourite hymn, or the fact that you want donations in your memory to be given to a specific charity.
  
  
• Book an appointment with a solicitor
  A will is an important legal document. We would always recommend that you consult a solicitor and ask him to prepare it so that it clearly reflects your wishes. This need not be expensive if you have followed the steps above and are clear, what you want your will to say before you consult your solicitor. Solicitors can give advice on tax matters and other issues and they will phrase your wishes so that they are clearly understood and legally enforceable.
  
  A home made will using a "do-it-yourself" form may not be legally binding if the wording you use is not clear and if it is not properly witnessed. Many words and terms have specific meanings in law which are different from their everyday use. If you have gone to the trouble of making a will, you might as well be sure that you have done it properly.
  
  
• How to find a solicitor
  There are 4 main ways to find a solicitor:
  
  1. Ask a friend for a recommendation.
  2. Ask at your local Citizens Advice Bureaux for a list of local solicitors who prepare wills.
  3. Look in the Yellow Pages.
  4. Look in a local directory. There will be one in your public library.
  
  Ask 2 or 3 solicitors for their charges and ask what these charges include as far as making your will is concerned. Then choose the one who seems most appropriate for you.

HOW SHALL I GIVE?

Once you have worked out the value of your estate, you will need to draw up a list of all the people you wish to benefit from your will and what they should have. There are several different ways of giving which your solicitor will be able to explain more fully.

• A pecuniary bequest
  This is the gift of a specific amount of money to a named individual or organisation, for example £5,000 to your local church. Remember that inflation will eat away at the value of these gifts so they should be reviewed from time to time.
• A specific bequest
  This means leaving an item of value to an individual or organisation. You will need to describe the item very clearly so that there is no doubt about what it is and you will need to give the name and address of the individual or organisation who is to receive it.
• A reversionary bequest
  You should make a reversionary bequest if you wish to leave someone a gift but would like another person to have it after the first person has died. For example you might want to leave your house to your partner for their lifetime but then to your children or someone else.
• A residuary bequest
  You will need to leave instructions, by making a residuary bequest, which individual or charity will benefit from the residue of your estate. “The residue” is what is left in your estate after all your other bequests have been made and any administration costs and taxes on your estate paid out. If you do not leave instructions the law will decide how this money is distributed.

Charities normally prefer to receive residuary bequests as over time the value of a specific bequest is liable to diminish.

GIFTS TO CHARITY

This is a good way of reducing the amount of inheritance tax due on your estate. Gifts left to charity are exempt from inheritance tax so they are deducted from the gross value of your estate before any tax liability is calculated.

If the value of your estate is near the tax threshold, a gift to charity can offer an effective way of bringing the estate within the tax free limit. (The current figures for inheritance tax are 40% on estates valued at over £275,000. You pay this tax on the overall value of your estate minus the tax free amount allowed. The size of the tax free amount for an estate is usually altered each year in the Budget).

WHEN SHOULD I CHANGE MY WILL OR MAKE A NEW ONE?

Once you have made a will it is important to keep it up to date. If you want to make minor changes it is easy to do this by adding a codicil. You should never simply write on your will to change it as this may make it invalid and could lead to all sorts of problems.

A codicil is an instruction which is added to an existing will. It is a legal document and must be signed and witnessed in the same way as your will. It is always wisest to ask a solicitor to draw up a codicil because it is a technical matter and getting it wrong could lead to problems with the will as a whole.

If you have already made a will a codicil is an easy way of changing your will to include a bequest to a charity.

If your personal circumstances change significantly you should make a new will. The kind of circumstances that means that you should think about this are marriage, divorce or re marriage, the birth of a child or grandchild, the death of a relative or if you yourself inherit money.



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