Thinking about life after your death isn’t exactly a pleasant experience, but it’s important nonetheless. Planning for the future means you need to account for a future that doesn’t include yourself. Writing a will is the best way to ensure your wishes are respected after you pass, and there’s no better way to start the new year than to ensure your family is cared for no matter what happens.
This does not constitute advice and advice should be sought in all instances before acting on it. The Financial Conduct Authority does not regulate tax advice.
The importance of a will
Without a will, there are no guarantees that your wishes for your estate (your assets and possessions) will be distributed as you wish to your beneficiaries. With a will, you clearly state your intentions for your property and possessions and delegate exactly how they will be shared. Without a will, family or loved ones with conflicting interests could end up fighting for estate and anything you wanted to happen with it will be moot.
What happens if I don’t have a will?
In England or Wales, if you don’t have a valid will then the law gets to dictate how your assets are distributed. If you don’t have any surviving family members then the Crown comes into your possessions and property and could do whatever they please with your assets.
If you don’t have a will then your estate will be subject to intestacy rules which means your wishes go out the window. Creating a will is crucial to estate planning and in turn, financial planning.
If you are unmarried or part of a same-sex couple, it’s perhaps even more important to create a will. Cohabitating partners do not share the same rights as married couples or civil partners, so stating your intentions for your estate in your will is the only way to ensure they aren’t left with nothing.
Furthermore, if you have children or dependents who count on you to take care of them, a will eliminates any uncertainty about their care in the event that you pass away.
Tax benefits
They say in life there are only two certainties: death and taxes. While a will won’t prevent death, it can help you avoid certain tax penalties and prepare your finances for when you do die. For example, leaving everything to your spouse helps you avoid Inheritance Tax as they are classed as an exempt beneficiary. Additionally, you can utilise your tax-free allowance to give some of your estate to someone else or a family trust.
Planning provides peace of mind
Planning ahead provides peace of mind that your loved ones will be taken care of financially without you. Comprehensive financial planning includes estate planning, of which making a will is the first step.
It’s best practice to regularly review your will at least every five years, or any time there is a significant change in your life like marriage, divorce, starting a family, or moving house. The new year is right around the corner, so start it off right by setting up a will or taking the time to thoroughly review the will you have in place.
Here to help
Having a will is an essential part of estate planning. If you don’t know where to start, we’re here to help. We offer full service financial planning, which means that while we aren’t able to assist you with drafting a will, we can work with solicitors who can to ensure your will integrates seamlessly with your overall financial plan.
We’re also part of a network of professionals, including legal services providers, who can assist you with estate planning. Contact us to get started.