Widows and widowers are set to receive a bigger payout if their loved one dies without making a will. But this doesn't mean you no longer need to write one...
At the start of this month, new rules were introduced in England and Wales to help anyone whose husband or wife dies without making a will. Previously, if a person died intestate (without making a will) and there were children involved, his or her partner would receive £125,000. If there were no children, the widow or widower would receive £200,000.
But as of 1 February, those figures were upped to £250,000 and £450,000 respectively -- a welcome move for many, given this is the first time the figures have been altered since 1993.
But as good as the news is, these changes shouldn't be viewed as an excuse to avoid making a will -- particularly if you are unmarried or separated.
Why you should make a will
If you're living together, but are not married, there's absolutely no guarantee you will inherit anything if no will has been made. And even if you are married, you shouldn't assume your spouse will automatically be entitled to everything when you die. What's more, even taking the new rules into account, your spouse could still lose out on a substantial share of the assets if there's no will to state otherwise.
Of course, contemplating what will happen after you die is not the cheeriest of subjects. But no matter how young you are or feel, if you want to ensure your loved ones are looked after properly when you die, it's best to write a will. That way you'll get to decide how your assets are shared and who gets what.
So here are some top tips to help get you started.
Use a solicitor
When it comes to seeking advice about writing a will, don't try to cut corners by using a will-writing service advertised online, or a will pack from your local stationers. These forms can be difficult to fill out accurately and if you make a mistake, your will could be invalid.
Unless your will is unbelievably straightforward, it's advisable to pay a little extra to use a solicitor. A solicitor can give you legal advice on more complicated matters, including Inheritance Tax, and can ensure there are no errors in the will.
The cost for this will vary between solicitors and will depend on the complexity of the will. But typically, you'll be looking to pay between £150 and £200. Mirror wills -- when a husband and wife (or partner) make almost identical wills -- cost less than two standard individual wills.
What do I include?
Before going to see your solicitor, it's worth thinking about what you want to include in your will. How much money do you have and what property and other possessions do you have? Don't forget to include savings, pensions, insurance policies and shares.
Make a list of all the people or charities you want to benefit from your will -- known as beneficiaries. When deciding what to leave to them, be as specific as possible to avoid any complications later on.
And as depressing as it sounds, if you have children under the age of 18, you'll need to decide who will look after them if you die.
Finally, think about who will sort out your estate and carry out your wishes -- known as executors.
Who to choose as executors
There's a common misconception that if you are a beneficiary, you can't be an executor -- but this is not the case at all. However, you cannot be a beneficiary and a witness to the will.
You can appoint between one and four executors -- it's advisable to have more than one in case he/she dies, for example (yes, I know this is rather morbid, but it has to be considered!).
Typically, relatives or friends, solicitors or accountants, or banks and building societies are chosen as executors. And many banks and building societies offer a will-writing service for customers who appoint them as executors. Be careful though as banks, building societies and professionals will charge to be an executor.
Keep your will up-to-date
Once you've drawn up your will, don't just forget about it. Having gone to the effort of writing a will, there's nothing worse than leaving it untouched for years when your circumstances have completely changed.
So it's best to review your will every five years and whenever your circumstances have changed significantly. This could include getting married, getting divorced or separated, having children, or buying a house. (In fact, your will automatically becomes invalid if you marry.)
You can change your will by making a minor alteration -- known as a codicil. Or, if you wish to make major changes, it's better to make a new will.
And don't forget to keep a copy of your will in a safe place and tell your executor where it is. This could be at home, with a solicitor, or at a bank. Alternatively, you can deposit one with a probate registry for a small fee. For further details on this, visit the Citizens Advice Bureau at www.adviceguide.org.uk
Scottish law is different
Scottish law on inheritance is different to English law. Currently, if there is no will, the surviving husband or wife receives the first £300,000 of a house, plus the first £24,000 of furniture. If there are no children, the surviving husband or wife also receives a payment of £58,000. But if there are children, the figure comes down to £42,000. You can check out the Citizens Advice Bureau in Scotland for further information.
Writing a will can sound daunting and very uninviting, but it really is important. Drawing up a will allows you to have the overall say about what happens to your assets, and even about who will look after your pet. This, in turn, will give you peace of mind and reassurance about what will happen after you die.
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