Have you got an up-to-date will in place? Over half of UK adults don’t, so you may be part of this majority. A Will ensures that your wealth is left in the right hands should you die and clarifies your Inheritance Tax position, so it is worth consideration, especially as it isn’t as difficult or as costly as many people think.
It is important to get it right though, else it isn’t worth the paper it is written on. And it’s important to keep it updated with changes to personal circumstances.
Who needs a will?
Many people opt to get a will prepared when they first buy a property or acquire assets, yet even the smallest pocket of wealth in terms of savings or possessions are worth protecting to ensure your loved ones will benefit in the best way in the event of your death.
A will also determines who will take care of any children you have as well as who is responsible for sorting your affairs out, so it goes further than just financial.
The contents of your will
There are generally four main parts of a will.
- Assets – this includes everything you own; property, savings, possessions as well as your debts
- Beneficiaries – who your assets will go to in the event of death. A trust is required for beneficiaries under 18 years of age
- Executors – who will look after your professional affairs, such as your estate and taxes following death
- Guardians – who will be responsible to care for any children under age 18
Inheritance tax – take precautions
Inheritance tax (IHT) planning should be considered in alignment with writing a will.
Depending on the total value of your estate, which is all your assets less debts, will depend if IHT needs consideration.
Typically doctors and dentists, due to their high net worth, need to consider IHT throughout their working life to take steps to effectively reduce the burden and leave more to pass on to your loved ones.
IHT is currently charged at 40% after the allowance of £325,000. This means estates worth over £325,000 are likely to fall subject to tax implications.
Married couples and civil partners can utilise their partners allowance if unused, taking the limit to £650,000 in some cases.
And following the Summer Budget there is also new plans to help IHT by providing an additional allowance of £175,000 with regards to the main residence. This is to be phased in over five years.
The bottom line is that IHT need careful consideration when writing a will, particularly when choosing the beneficiaries.
Who is best to write a will
Over half of UK adults don’t have a will but 68% of those who do, opt to use the help of a solicitor and 12% used a will writer (WillAid survey).
If affairs are complex then professional advice from a solicitor is typically recommended, despite a larger cost. Such complex examples may be overseas property or a large extended family.
A will writing service will be more cost effective, but they are not required to have nearly the same level of training as a solicitor so again, it depends on the complexity of your personal requirements.
It is even possible to buy a kit to write your own will for as little as £20. This really is only an option for the most basic of set-ups though.
Keep updated
When you have a will it is vital to keep it updated with changes to your personal situation. This could include marriage, divorce, new children or new assets. Effectively the information held needs to be accurate for the exercise to be worthwhile.
Dental & Medical Financial Services can help provide expert tax planning advice regarding IHT. We can also put you in contact with professional solicitors to help you with the process of writing or updating a will. Call today to speak to the team.
Tel: 01403 780 770