There are many reasons why you should make a Will:-
• Looking after your loved ones. Although it can be hard to talk about death, making it clear how you would like your estate to be distributed can save everyone a lot of worry. Deciding who you want to leave your property, savings and possessions to should ensure that everything goes to the people and causes you care about.
• Protecting your assets for future generations. A well-structured Will can ensure that assets are kept within the family and are passed on down the generations.
• Reassurance. A Will is a written instruction to make sure your estate goes to the people and causes you intended.
• Avoiding disputes. Badly drafted Wills can cause arguments among family members and may even need a solicitor to resolve them. Leaving a properly prepared Will should remove any doubt about who you want to benefit from your estate and avoid additional stress at an already difficult time.
• Your funeral. Your Will can include whether you would prefer to be buried or cremated, and the type of funeral service and music you would like. For more information about funeral options, see our free guide When someone dies.
• Saving on Inheritance/Death Tax. With a carefully planned Will, it may be possible to reduce the Inheritance Tax bill payable by your estate after your death.
What happens if I don’t make a Will?
If you don’t make a Will, in legal terms you Will die ‘intestate’ and your estate may not go to the people you intended. In this case, there are special rules called the Intestacy Rules for how your estate Will be distributed.
Your estate means everything you own, including money, property, possessions and investments (your assets). These assets Will only be distributed after all your debts, funeral and administration expenses have been paid. Under the Intestacy Rules, the Government (of the jurisdiction of assets) decides what % and who should inherit.
If you are in Hong Kong and have a civil or married partner with children, your spouse receives 50% and the children the other 50% but many other parts of the world such as UK and USA would give everything to your spouse. Also in HK, if you have no children but have a married or civil partner, 50% could end up with your in-laws as the Intestacy Laws say that 50% goes to remaining parents and/or siblings.
Usually, the distribution is not as we assume it to be and can cause financial stress and anxiety when a simple instruction is all that is needed.
How to make a Will?
There are a number of different ways to make a Will:-
Make your own Will: If you decide to make your own Will, you must make sure that it Will be valid and that it Will lead to your wishes being carried out exactly as you specify them. You can buy ‘do-it-yourself’ Will kits and forms from stationery shops and online, but it’s easy to make mistakes when filling them in, miss out important details or not be absolutely clear what you want. This can cause problems for your beneficiaries and Executors after your death. A Will is a legal document so it needs to be written and signed correctly. If you decide to make your own Will, research the different kits and forms available and seek advice first.
Professional Will writers: Professional Will writers are not qualified solicitors and may not be regulated. If you decide to use one, check whether they are a member of the Institute or Society of Professional Will writers first.
Solicitors: It’s usually best to get advice from a solicitor, except in very simple cases. You may wish to speak to a solicitor who specialises in Wills and probate. If you decide to use a solicitor, first check that they are licensed with the Law Society. Ask them to confirm their fee for writing your Will, as solicitors often charge a fixed fee for this work rather than their hourly rate. Their fees should be explained in their letter of engagement. Your solicitor may be able to store your Will safely for you. Check whether there Will be an extra charge for this.
You must let your Executors know where it’s kept! You can also request copies of your Will to keep yourself and, if you wish, give to your Executor(s).
What to include in your Will?
You should make sure that it’s absolutely clear what you want to happen to your whole estate. You can make specific gifts to particular people and then state where the residue of the estate (any property or money left over after paying funeral and administrative expenses and legacies) is to go.
Alternatively, you can divide your estate between a number of people in specific proportions, for example, half to your spouse and a quarter each to your two children. You should also state what you want to happen if any of your beneficiaries should die before you do. You can leave money to charities in your Will, too. Who you leave money to might affect whether or not you need to pay Inheritance/Death Tax.
You do not need to write all assets in your Will but should keep a list of all assets with your Will. Your Executor/s Will have to distribute your assets so need to know what you own.
You should review your Will at least every five years and after any major change in your life, such as divorcing, having a new grandchild or moving-house/countries.
Signing the Will .
You must sign your Will in the presence of two independent witnesses, who must then also sign it in your presence – so all three people should be in the room together when each one signs. If the Will is signed incorrectly, it Will not be valid. It is very important to make sure that beneficiaries of the Will, their spouses or civil partners, and your Executor(s) do not act as witnesses, or they Will lose their right to the inheritance. Beneficiaries should not even be present in the room when the Will is signed.
Deciding who you want to leave your property, savings and possessions to should ensure that everything goes to the people and causes that you care about.
When you make your Will, you Will need to choose your Executor(s). These are the people who Will deal with your estate, collecting and distributing your money and property after your death. Being an Executor can involve a lot of work and responsibility, so consider carefully whether the people you want to appoint would be suitable. Explain to them what’s involved and check that they’re Willing to act on your behalf. You can appoint any number of Executors, but only a maximum of four may apply for the Grant of Probate, the official document needed to deal with your estate. It’s a good idea to choose more than one Executor, so that they can share the responsibility of dealing with your estate, and in case one of them dies before you do. The people you choose to act as your Executors can also inherit something from your Will, but they aren’t usually paid for their work as Executors.
Acting as an Executor is not an easy task and your family and friends may prefer not to take on the role. You could appoint a professional Executor, such as a solicitor or an accountant. A professional Executor could be especially useful if your estate is large or complicated, if there is likely to be a family dispute, or if someone independent would be better placed to deal with things. They Will charge for their services and this Will be paid for out of your estate.
Valuing your estate
When arranging to have your Will written, it’s worth drawing up a list of your assets and debts. This Will give you a clearer idea of what your estate is worth, which Will help you to write your Will.
Assets that typically make up an estate include:
- your home, and any other properties
- your own savings in bank and building society accounts
- insurance, such as life assurance or an endowment policy
- pension funds that include a lump sum payment on death
- investments such as stocks and shares or investment trusts
- motor vehicles
- jewellery, antiques and other personal belongings
- furniture and household contents.
Debts may include:
- credit card balance
- bank overdraft
- equity release.
Leaving a legacy
Your Will is a way to remember those who are important to you. After you have provided for family and friends, like many other people you may choose to leave legacies to your favourite charities. A legacy is a gift made in a Will.
Different types of legacies include:
- residuary – a proportion of your estate given when all other costs and gifts have been paid
- pecuniary – a fixed sum of money
- specific – a named item, such as a house, gold watch, or piece of furniture.
If you plan to leave a gift to a charity in your Will, make sure you include the charity’s full name, address and registered charity number. Incorrect information may result in your chosen charity not receiving the gift.
If you have created a trust in your Will your Executors can be appointed as trustees as well. A trust is a way of looking after assets for other people, for example when someone is too young to manage their affairs. If anyone under the age of 18 is to be a beneficiary of the trust, you should appoint at least two trustees/Executors or a Professional company.
If your estate is large in value, a simple Will is sometimes not enough to ensure that assets are preserved and distributed efficiently. A Trust can ensure legacy planning by maintaining ownership of assets for the long-term, perhaps for generations to follow.
For certain, you need to leave behind a set of instructions that are clear and concise, and these must be witnessed by 2 independent people, ideally of the same age or younger – they may be called as a witness if there is a contest to the Will.
Happy to help as some Wills are very simple (married with 2 children; assets in one country) whereas some can be more complex (second marriage; assets overseas.)
I can help you understand what is vital for your loved ones.