Making a Will

by Kate McCormick

A guide explaining how to make a Will which explores the legal and practical issues involved in making a Will.

Most people are aware that at some point, sooner or later, they will need to think about making a Will. However, for many, the issue is considered later rather than sooner, as it is put off and off and sometimes not completed at all.

Having a Will is an important way of influencing what happens to your property and possessions after your death. It may also be the only way that you can ensure that certain people are adequately provided for by you and how and when this is done. A Will also provides the opportunity for you to maximise your estate for the people you wish to benefit, through tax planning. Even if you do not think that you own sufficient property to bother, you may be surprised when you come to list everything that you own and discover the value tied up in your property, policies and other items.

Not everybody, however, is legally able to make a Will. You must be over eighteen (unless on active service in the armed forces or at sea) and have sufficient mental capacity to be capable of understanding the nature of what you are doing and the effect of the Will and its provisions. If there is any doubt as to a person’s capacity or if there is a possibility that he/she was coerced or unduly influenced by someone when making his/her will, it could be challenged in court and found to be invalid. Where there could be a risk of this, legal advice should be sought and a doctor asked to give his or her opinion and witness any Will. If someone lacks capacity, the court can be asked to produce a statutory Will on behalf of that person to provide for those who would be reasonably expected to benefit.

What happens if you do not make a Will?

If you do not make a Will or your Will is found to be invalid or just cannot be located, your estate, after any debts, liabilities and funeral expenses have been subtracted, will be distributed in accordance with the state’s ‘rules of intestacy’. You will not be able to influence exactly who benefits or make any tax savings for the beneficiaries. The rules of intestacy date back to 1925 (with some subsequent amendments) and as a result are inadequate in dealing with all the family structures and arrangements of today, often resulting in an inappropriate and unfair arrangement.

There is a fixed order as to who will inherit:

1. Your Spouse
2. Your Children (including illegitimate and adopted children, but not step children)
3. Your Parents
4. Your Brothers and Sisters
5. Your Grandparents
6. Your Uncles and Aunts.

If any of these people die before you do, their children will inherit in their place, so a grandchild, great grandchild or niece/nephew cannot inherit unless their parent or grandparent has died before you. This applies down the list until there are no surviving relatives who can inherit, in which case the estate passes to the Crown. It is important to realise that if you do not make a will, your whole estate will not necessarily just simply pass to your spouse or civil partner. Some of it may go to your children, parents, brothers or sisters, even whilst your spouse is still alive.

Neither a partner who is not married to you or in a registered civil partnership with you, nor anyone else not included in the above list (stepchildren etc) will have any right to inherit, if you do not leave a will, unless they make a successful application for maintenance under the (Provision for Family and Dependents) Act 1975 (see below). Neither will you be able to benefit charities or pets.

It is possible that the court may vary the rules of intestacy if it approves a ‘scheme of family arrangement’. For this to occur everyone who would benefit under the rules of intestacy must apply within two years of the date of death and must all agree to the scheme. This is, in effect, their own will, describing how they have agreed to distribute the estate amongst themselves and/or to anyone else.

How to Make a Will

It is perfectly possible to make your own Will, if your financial affairs are not too complicated and provided that you follow certain rules and steps to ensure that it will be accurate and valid. However, it is recommended that if you are at all in doubt, you should ask a solicitor to check through its provisions, to reduce the risk of costly and stressful legal proceedings being brought, which could reduce the value of your estate.

In most situations you can use a good Will template to create your own Will. We have a range of Will templates that are suitable for this. It is recommended that you use a Solicitor to draft your Will if your estate is large or complicated; if you wish to reduce the amount of inheritance tax to be paid; if you wish to include trusts or complicated bequests (for example involving life or conditional interests); if you wish to leave property to a charity; if you share a property with someone who is not your spouse or civil partner; if you have any overseas property; or perhaps if your family situation is complicated, with ex spouses and children from previous marriages. By way of an example, if you have a child from a previous relationship and make a Will leaving everything to your current spouse, there is nothing to stop your spouse from changing his/her Will to cut out any such child. This could be guarded against by using a life interest trust that could provide your spouse with the right to live in your matrimonial home and/or to take the interest from your assets during his or her lifetime, whilst preserving the capital for your children. A Solicitor would be best placed to advise you of any appropriate structures, to cover your particular situation.

Drafting Your Will

1. Work out what your ‘Estate’ is

First of all you need to make an accurate list of what all your property and assets are likely to consist of at your death. This should include amounts and details of exactly where the assets are located (i.e. bank details, sort codes etc).

You should then list all debts and liabilities (including funeral and executors’ expenses and any potential tax liability) and subtract these from the total asset value. This will leave you with a list of assets, property and a final monetary sum (together, your ‘estate’) that you can then start to share out (‘bequeath’ or ‘devise’), bearing in mind the following:

If you own property as a joint tenant, your share will automatically pass to the other joint tenant(s) upon death, irrespective of what is in your will. This is the same for money held in a joint bank account. You can check with the Land Registry as to whether you hold property as a joint tenant or tenant in common.

If you own property that is subject to a mortgage, the beneficiary will be responsible for paying this, unless you state that the property is to be bequeathed free from all mortgages, which must then first be discharged from the ‘residuary estate’ (see below for the meaning of this).

Insurance policies should be carefully considered. If the proceeds are held in trust for someone else, they will not form part of your estate and will be automatically paid out upon your death. They should not, therefore, be included in your Will. If they are in your name, however, they should be dealt with in your Will. Similarly, post death payments under pension schemes are likely be dealt with in accordance with the scheme rules and do not form part of your estate. Other property over which you have only a life interest under a trust or which you only hold on hire purchase or under a licence should not be included in your Will.

Private company shares may be subject to stipulations in the company’s Articles of Association or a shareholders’ agreement as to whom they may be transferred after a shareholder’s death and so should not be left in a wWll unless any such provisions will have been complied with. You should check with the company as to whether there are any such conditions.

After you have dealt with all specific property, you must also make provision for the ‘residue’ (or ‘residuary estate’). This consists of any money or assets remaining after the specific gifts (‘legacies’) have been paid out. This can be left to one person or shared out in specified proportions. It is essential to make provision for this as there is usually something that you will have acquired after making your Will or perhaps simply forgot about.

Your assets and property can be dealt with in your Will or beforehand in a way that minimises charges to inheritance and other taxes. If this is a particular concern, you should seek the advice of a Solicitor and/or accountant. If you make bequests ‘subject to tax’, the beneficiaries will have to pay, otherwise any tax must be first paid out of the residue. You can currently leave up to £325,000 tax-free to anyone in your Will.

2. Decide who the Beneficiaries are

You should then make a list of everyone that you want to benefit from your wWll (the ‘beneficiaries’) and how much/what you wish to leave to each of them (‘legacies’). When doing this, you should bear in mind the following:

You may wish to impose conditions on a beneficiary, which they must fulfil before or after receipt of a bequest. Be aware though, that the court can remove any conditions on application by a beneficiary, if it finds them to be unreasonable or contrary to public policy. The removal of prior conditions will strip the beneficiary of the bequest so that the assets in question will instead form part of the residue and be shared out accordingly. If it is a condition subsequent, the beneficiary could simply receive the bequest unconditionally. Limitations imposed on the period of ownership, however, are more likely to be found valid.

If you leave assets to children who are under eighteen at the time of your death, they will not receive their inheritance until they reach eighteen or marry or enter into a registered civil partnership under that age. Their inheritance will be kept in a trust before then, although the trustees may use up to one half of it for the child’s maintenance. A trust is also necessary if you wish to leave assets to someone who is incapable of managing their own affairs. You should seek legal advice if you intend to use a trust.

Your Will should state what is to happen if any of the beneficiaries die before you do and you could also make contingencies for possible future changes e.g. if your estate is not large enough on your death to meet all legacies.

If you wish to leave something to a charity, you should check with them first as to the nature and form that your bequest should take and ensure that you have correctly noted the name, address and charity registration number of the correct charity. The gift should be for ‘charitable purposes’ in case a particular charity goes insolvent and you should take legal advice as to how to frame your bequest accordingly.

If you wish to leave pets in your Will, you should check that your beneficiaries are happy to look after them. If not, you can leave them to an organisation such as the RSPCA. You should check whether there are any registration formalities that you should first comply with.

You should be aware of the Inheritance (Provision for Family and Dependents) Act 1975. The court can change your Will on an application by your husband or wife after your death, to give them any such amount of money as it thinks reasonable, by analogy to a divorce. Certain other people may have the right to apply to have your Will rectified in their favour but only for the payment of essential maintenance. These people are your former spouse or civil partner, providing they have not remarried; your children; anyone who was treated as a child of your family in relation to any marriage of yours during your lifetime and any other person who was maintained by you immediately before your death. A claim must be made within six months of the grant of probate or of letters of administration. This means that if you do not cater for these people expressly in your Will, you will not be certain of how much they might receive and of how much this could reduce other bequests that you have made. If you do not wish them to benefit, you could explain why in your Will, or, preferably, in a separate private letter annexed to your Will, so that this could be used as evidence if an application were made by them.

The court may also deprive a beneficiary of a bequest for policy reasons e.g. if they have committed a crime or the bequest itself is illegal or contrary to public policy.

3. Decide who the Executors are

You then need to decide who is to administer the Will (the ‘executors’). Usually there are two equal executors, in case one of them dies or cannot act, but there may be any number from one to four and it is useful also to make provision for replacement executors. The executors must give their consent so it is important to ask them first as they will have many important and sometimes complicated and time - consuming duties after your death. Executors can also be beneficiaries and are usually relatives or friends or you can instruct a firm of Solicitors, accountants or a bank, if you are prepared to pay them a fee out of your estate. Non-professional executors are entitled to be paid their expenses out of the estate but not a fee, unless you include an express provision for this. If there is no-one that you can appoint, the Public Trustee or in some cases the Official Solicitor can act as executors. The executors should be well organised and able to cope with the responsibility and stress involved in administering your estate. If you have a large estate, where there will be complicated tax calculations involved, a professional executor may well be more appropriate.

4. Work out any other arrangements

If you have children under eighteen years of age, for whom you have parental responsibility, it is important to appoint a guardian in your Will. This is someone you wish to look after the child in case there is no-one else alive with parental responsibility for them. You should also provide for any maintenance payments for such children, as if you do not, executors only have the power to use half of a bequest to that child, for his or her maintenance up to the age of eighteen.

Most Wills also deal with funeral and burial arrangements. These are not legally binding and the executors can change the arrangements if they are impractical, but they are likely to abide with your wishes where possible. It is always best to discuss this with them beforehand, as it may be too late once the will is read. Such arrangements are, therefore, often dealt with by a letter to the executors instead, or in addition to being included in the Will. You should check with any authority, church or cemetery that your proposed arrangements are legal and authorised.

You may also include a recital at the bottom of your Will containing any expressions of affection you wish to make and/or explaining your reasons for drafting your Will the way you have e.g. acknowledging people to whom you may not have catered for.

Legal requirements in Making a Will

A Will must be made in writing in order to be valid. A Will must also be witnessed by two independent witnesses who are not beneficiaries under the Will. For a full guide to the legal requirements to making a Will read our article on the Legal Requirements for a Will.

What to do once you have made your Will

Once your Will has been completed and is valid, you should take a copy and then place it somewhere secure, but accessible, for safekeeping. This could be at home but it may be wise to keep it with your Solicitor, accountant, bank or the Probate Registry. You should inform the executors of where it is kept. It is also extremely helpful to keep any papers that the executors may need to administer your Will in an organised way and to inform them of where they are kept (e.g. share certificates, title deeds, bank details, details of debtors and creditors, policy documents, mortgage and pension documents and details of any gifts made etc).

Changing your Will once you have made it

You should review your Will periodically and particularly if your circumstances, or those of anyone mentioned in it, change (for example, having children or grandchildren, moving house, the death of a beneficiary, executor or guardian, divorce, separation or marriage).

If you become divorced, you should be aware that, once the decree absolute is issued, any reference to your former husband or wife, as beneficiary, executor or guardian, in your Will, is automatically revoked. You will therefore need to amend your Will if you wish it to specifically provide for him or her or if you want to make provisions for an alternative specified beneficiary, executor or guardian. On the other hand, if you die whilst separated but before a decree absolute is obtained, and if you have not made a Will or amended an existing Will, your husband or wife may inherit much more than you would have wanted. If you get married, any wWll that you have written previously will automatically be revoked in its entirety, so you will need to make a new one. This will occur unless you have stated expressly that the Will is made in contemplation of your marriage to the specific person that you marry.

Any change or addition to a Will must be by an additional document called a ‘codicil’, which must be signed by you and witnessed; or by making a new Will if there are many changes to be made. The new Will should state that it revokes all previous wWlls and codicils. The previous Wills and codicils must then be physically destroyed. It is wise to instruct a solicitor, to ensure that any changes you make are clear and binding.

What Will Happen with your Estate when you Die?

Once your death certificate has been obtained, the executors may have to apply for a grant of probate. They will first have to calculate whether, and if so how much, inheritance tax is payable on your estate. This is only payable if the total value of your taxable estate is over the threshold, currently £325,000. Some items in your estate do not qualify for inheritance tax and are discounted and others not in your estate, (e.g jointly owned property or assets that you have given away before death), may still be counted. This can be a complicated exercise, so if you have a large estate, you should consider appointing a professional executor.

Once the grant of probate has been obtained, the executors can then start paying off your debts and collecting in your money and assets and distributing them in accordance with your Will. If there is no Will, it often takes much longer to distribute an estate in accordance with the rules of intestacy. Therefore, a clear, carefully thought-out Will should make this job much easier, quicker and less stressful for all concerned and provide you with peace of mind.