The importance of keeping a Will 

Lisa Caplan, director of Charles Stanley Direct Advice and Guidance at Raymond James Wealth Management, highlights the importance of keeping a Will up to date and discussing estate plans with family. She warns that failing to plan can lead to unintended outcomes under intestacy rules and higher inheritance tax bills. Her comments come as Free Wills Month begins on 2 March, offering those aged 55 and over the opportunity to have a will written free of charge.

A Will is the foundation of any end-of-life plan and is a vital document when it comes to estate planning. It ensures your assets are distributed according to your wishes and can help prevent confusion or conflict among family members. Yet many people either don’t have a Will or haven’t updated it in years.

1. Discuss your assets with your loved ones

Discussing how your assets will be dealt with when you pass away can be a difficult conversation to have, but it could be one of the most important conversations you ever have too. Our research found that 41% of high net worth individuals (HNWs) have not discussed their plans on passing down their wealth with their family or beneficiaries This risks leaving knowledge gaps among those who may inherit wealth, and also could result in higher IHT bills than expected. Discussing your assets also prevents any possible disputes or conflict further down the line between beneficiaries. 

2. Think about who you include when writing or reviewing your Will

When writing your Will, not only should you think about what you’re including and wanting to pass on, but also who to include. For example, who would you like as your executors and/or trustees? Who would you like to act as the guardians of any children under 18 should both you and the other parent die? 

As you go through your own life stages, such as marriage or having children, you may reconsider who will be in control of what part of your Will. Though 75% of HNWs do have a Will in place, a third (33%) admit that it needs updating. As a rule of thumb, a Will should be reviewed every 3 to 5 years to take into account any changing circumstances.

It’s also worth noting that if you are getting married, or divorced and remarried, a new marriage renders all previous wills void unless explicitly made in expectation of marriage to a named person.

3. Don’t assume everything will pass onto one person

Many people assume if you are married everything will pass to your spouse. This is not the case if you have children and die without a Will; this is known as dying intestate and can leave many problems for your family, as your spouse may only receive a proportion of the estate. It’s important to speak to your loved ones about your intentions and wishes early as not doing so can come at a price and your family can lose out unnecessarily. The earlier you plan the more options you have. 

4. Give money to charity in your Will

If you give 10% or more of your net estate to charity, this will effectively reduce the overall IHT on your estate from 40% down to 36%. For many families with excess wealth, this is an ideal way of reducing the tax burden and doing good, as well leaving behind a legacy.

5. What if you don’t have a Will?

If you die without a Will, your estate would be distributed in accordance with the intestacy rules. These rules would determine what would happen to your assets that would otherwise have passed under your Will. This can often result in unintended beneficiaries and an unfavourable tax situation where the taxman benefits instead of loved ones. Intestacy can be particularly disheartening for unmarried couples, who have no entitlement under the rules.