Wills are often a cause of grief whether it’s real life as lived by celebrities or real life as lived in the soaps. Eastenders fans have thrilled to the contents of Pauline Fowler’s will in recent episodes and the legal wrangling over the final testament of tragic Anna Nicole Smith will probably rumble on for some time yet. And then there’s real life as lived by the rest of us in the continuing controversy over the effects of inheritance tax. If you have more than £285,000 when you die the taxman will tax you for dying.
It’s a controversial issue which can cause a stir, but these issues also highlight the importance of having a will in the first place. Whatever you make of the high-profile cases, the fact is writing a will is a responsibility you shouldn’t put off – it’s a sad fact that you never know what’s around the corner, and the worst thing you could do is leave your family without instructions on what to do when you’re gone.
It’s a morbid thought but MoneyExpert.com is here to show the way through the will-writing maze and to pass on some cost-saving tips…
Leave it to the professionals
It’ll often be the case that you’ll need a solicitor to get you through the nitty gritty. This will especially be true if you have children or plenty of assets to split up as things can get complicated.
In fact, a professional could save you money in the long run. They’ll ensure you avoid mistakes and the final version should at least make sense to everyone when the time comes.
The executor decision
The executor is the person who will see out the instructions you leave in your will. Normally they’ll be a member of the family or a friend, but it could be your lawyer or even your hairdresser – basically it should be someone you trust. If you don’t choose someone yourself it could count against you as the courts will have to pick someone when you die.
If your kids are under 18 you will need to be explicit about who you want to become their legal guardian. If you don’t, the decision will be drawn out and complicated and may eventually go against your wishes. Custody battles can be nasty but you can help your loved ones avoid it all by naming a guardian in your will.
Don’t forget your will
Unfortunately a will isn’t something you can write once and forget about forever. As your circumstances change, it’s likely your wishes will change too. It’s normal to revise your will every three or four years – this is particularly important if your family grows or you come into extra wealth.
…but save yourself some cash
If you keep going back to your solicitor the fees will soon add up, but you can avoid the extra costs by stating in your will that you have a specific list showing where your non-monetary assets will be divided up. You can keep that list at home and change it whenever you like.
What about the so-called Death Tax?
Inheritance tax, or ‘death tax’, is a levy on your assets once you pop your clogs. But don’t worry, you have to have over £285,000 in the bank (rising to £300,000 from April 2007) to qualify – but that does include the value of your home. The Government will take 40 per cent of everything above the threshold.
Take the opportunity to plan ahead
A good will can act as the foundation of a financial plan. From pensions to life insurance policies, you’ll need to consider who benefits if you die.
Whatever your circumstances, a will is a must – it doesn’t take long and needn’t cost much to do, so take a moment now so you don’t regret it later.