A Will is a legal document declaring what a person wishes to happen to their estate and assets upon their death. It can name specific people or charities that the testator wishes to leave things with. It can also include desired funeral arrangements and specify guardians for any children left who are under the age of 18.
Writing a Will is very important for a number of reasons, and there is no doubt that it pays to plan in advance. Below is a guide to some of the main reasons why making a Will is so beneficial.
Reduce Inheritance Tax
In the UK, if an estate is over £325,000 then it will become liable to 40% tax. Obviously this is a significant amount, and one way you can reduce this is by writing a Will and splitting up the assets.
An inheritance can bring joy long after a person has died
Paying part of your money into a trust for your spouse and children to benefit from is a great way to reduce inheritance tax and just one option that you might want to consider. As everyone’s individual situation is completely unique, the best way to check out how you can reduce your inheritance tax is by seeking professional advice.
Avoid Intestacy Rules
If you do not write your own Will, then there is a default process set by the government.
If you have not written a Will and you die, then your spouse does not automatically receive everything you own. They would receive up to £250,000 of your personal possessions and estate, but any more than that could be split, depending on what other relatives you have.
Half of the extra estate could be split between the children, and if so, the other half would be described as a ‘life interest’ for the spouse, as they will continue to benefit from that money, although they can’t spend it. After the death of the spouse, the remainder of that money will be passed onto the children.
Avoiding intestacy rules is the best for your loved ones
This default will can cause a lot of family disputes. The easiest way to ensure this doesn’t happen is by writing a Will before you die. This can save you a lot of money (on inheritance tax) and ensure that your assets go to the people you care most about.
Reduce the Funeral Costs
Another way that it pays to write a Will in advance is because it can save your family money with funeral costs. Funerals can be very expensive depending on the casket and burial stone you choose. Or you may want to be cremated, and this is something you can declare in your Will.
You can set aside a certain amount of money in your Will that can cover the costs of your funeral, or you can pay for it in advance. Obviously most people don’t know when they’re going to die, which is why leaving money in the Will that will cover the funeral is a more popular option.
Help People Out
Finally, writing a Will can be a good way of helping out your family members, friends, loved ones and even charities. Click this link to research this topic more. You can set out how much money you would like to give each individual person or group in your Will.
You may want to leave a trust fund for your children, or help your grandchildren through university by leaving them a dedicated savings account. Writing a Will can ensure that your wishes are fulfilled and the money goes to the appropriate people.
In conclusion, it definitely pays to write a Will in advance. Whether you want to reduce inheritance tax, avoid intestacy rules, reduce funeral costs or simply help out your family and friends financially, there are lots of benefits.