Years of hard work and prudence have built a fund of money that will provide security for your family should anything happen to you. Or will it? If you haven’t yet made a Will, the people you thought would benefit from your life savings could lose out in the long term or suffer stress and financial hardship while your affairs are resolved. By making a legally valid Will – the foundation of your financial planning – you ensure that your wishes are followed and that your family’s future is safeguarded.
Without a Will the government decides who should inherit your possessions, property and money through the Laws of Intestacy. Depending on the size of your estate, your spouse may have to split the assets with your children or parents, possibly forcing them to sell the family home. If you are unmarried or have step-children, your partner or any step-children do not automatically inherit anything from your estate.
Without a Will you have no control over your children’s future. Should anything happen to you, it becomes a matter for the courts who appoint someone on your behalf – someone you might not have chosen yourself. See the section on Guardians.
If you don’t want the taxman to be the biggest beneficiary of your hard earned money, you can set up a Nil Rate Band Trust in your Will that distributes your assets in such a way that Inheritance Tax is minimised or eradicated altogether.
Once you’ve gone you would hope that your intended beneficiaries will inherit all of your wealth. However, this may not always be the case. There could be claims against your beneficiaries such as long term care costs, remarriage, divorce, creditors or bankruptcy which could leave your children, grandchildren or other beneficiaries with little or none of your estate. See our section on Asset Protection and Estate Planning for information of ways to mitigate the losses to your estate.
You can stipulate sums of money you want to leave to people outside your close family circle or to a charity that you support. Note that gifts to UK charities are exempt from Inheritance Tax.
You want to ensure that your business can continue trading after your death by giving your executors the necessary powers (powers that they might not ordinarily have) and also that that any Business Property Relief you have today is preserved after your death. See the section on Business Protection.