Making a will is an important privilege. By doing so, you can control how your assets are distributed on death, including how you provide for friends, family and loved ones. If you do not make a will, a set of default legal rules (i.e., intestacy) will apply to distribute your estate, which may not reflect your preferences.
Who should make a will?
All people with assets, no matter how small, should make a will. Even if you don’t own a house or land, it is still important to have a will. You may own a car, furniture, jewellery, or hold bank accounts, savings or life policies which your family, friends or neighbours would be happy to receive by will.
A common misconception is that wills are only for the elderly. Instead, a good starting point is couples with young children. A will is an opportunity to make provision for your children in the event of a joint death. We would recommend a legal trust appointing guardians and trustees to take care of young children and manage their affairs. These discretionary trust wills are tax efficient and unlikely to need change until your youngest child reaches 20.
Single parents should likewise make wills and appoint guardians for minor children.
If you get married, widowed, separated or divorced, new wills are immediately necessary for different reasons.
Wills need to be updated. Life circumstances change, assets may increase or decrease, beneficiaries may pass awa, or grandchildren may arrive. So do ensure that your will remains valid and relevant. Generally, we recommend a review every five years.
What are the benefits of a good will?
Tax Planning – Tax legislation sets limits on the value of gifts you can make to family without them incurring gift tax (CAT). If these thresholds are exceeded, the family will be hit with unnecessarily large tax bills which can be avoided by a tax-planned will.
Making Proper Provision – Where a person dies without a will (called intestacy) the default rules automatically apply to distribute the estate. This can lead to outcomes never intended by the deceased and wreak havoc, especially where a family farm or business is involved. An obvious example is of a child remaining at home and committing all their time working the family farm on the understanding that they would one day inherit it. Without a will, the farm will be divided among the entire family, resulting in the farmer being unjustifiably forced off the land if he or she is unable to buy out the share of their other siblings and surviving parent.
Certainty – A well-crafted will results in legal certainty and greatly reduces the risk of legal challenge by disgruntled parties. This ensures that your assets are not wasted on dealing with legal disputes.
Organising your Affairs – Making a will involves a review of your financial affairs with your solicitor. This presents an opportunity to consider and efficiently plan your existing financial affairs which may result in making some tax efficient lifetime distributions of your assets.
Fairness – Some children may need a little more than others which should be reflected in your will. If there are no children, it is right to remember those who have been kind to you in life and a will is a good way to achieve this. Take two contrasting cases involving bachelor farmers; the first died intestate and most of his farm went to distant and unknown cousins in America; the other made a will with us where he remembered relatives, friends, kind neighbours, local clubs and charities. This highlights the value that a good will can deliver to those around you.
Our advice is make an appointment with your solicitor and make your will; it is not an ordeal but rather an essential document.
