Frequently Asked Questions
What Is A Will?
A Will is a legal document stating what you would like to happen to your estate. Your estate consists of your house (less any outstanding mortgage or other loans secured on it), cash, savings, vehicles, household and personal effects, proceeds from any life assurance policies and pensions where there isn’t a named beneficiary or the plans are not written in trust LESS any outstanding loans, credit card balances, household bills, funeral expenses, etc.
It doesn’t matter how little you think you are worth, it is important that you make a Will. Without a Will your relatives and friends could face severe difficulties, although you may not like it, if you don’t make a Will the law will decide your beneficiaries for you, which may not be what you would have wished. You must sign and date your Will in the presence of two witnesses (England, Wales and Northern Ireland).
You must appoint an executor in your Will to ensure the terms of your Will are carried out. Sometimes one executor is sufficient but where there are potential beneficiaries who are not yet 18 years of age, then two executors are advisable.
Your Will is an invaluable opportunity for you to clearly make your intentions known relating to:
Who you wish to act as executor of your Will
Who you wish to act as guardian of your children and how you wish to provide for your children’s upbringing
How you would like your funeral conducted
Whether you wish to donate your organs or donate your body for medical research
Provisions to reduce death duties (Inheritance Tax)
How to provide for your pets or one or more favourite charities
Who you wish to receive your personal items, investments and or property. Whether the gift has real value like your house or has less or sentimental value e.g. a watch or wedding ring.
What Are the Two Types of Will Available?
There are two key standard Will types:
Single Will – Wills for individuals
A single Will is designed for one person to appoint their choice of trusted individuals to act as executors of their estate. This will also allow you to give specific gifts and nominate who will benefit from your estate.
Critically, a single Will allows the appointment of guardians for minor children giving peace of mind for future care.
Mirror Wills – Wills for couples
A mirror Will is designed for couples, whether married, unmarried or civil partners, who have similar wishes for the distribution of their estates. A mirror Will allows for the appointment of executors, making gifts of items or sums of money and the distribution of the remainder of an individual’s estate following payment of debts. A mirror Will can also contain provision for the appointment of guardians allowing couples to nominate those they feel best suited to care for their children.
Can I Make Changes to My Will?
It’s very easy to forget to amend or review your Will but if you don’t keep it up to date the provisions in your Will may not reflect your intentions.
Amending and reviewing your Will
We would always recommend you regularly review your Will, usually every three to five years as personal or financial circumstances can change over time. Certain life events may also prompt you to review your Will such as marriage, divorce, the birth of a child, and retirement.
What is a codicil?
A codicil is a supplemental document to a Will which makes minor alterations but leaves the rest of the Will intact.
There is no limit on how many codicils can be added to a Will, but they are only suitable for very straightforward amendments to your Will. If a complicated change is involved, we would usually advise you to make a new Will and nowadays it is easier to arrange a new Will to cover those changes rather than create a codicil. (See details on our Will for Life Scheme)
What Can I Do With My Will?
Some people choose to keep their Will as simple as possible and so gift all their estate (as one lump – called the “residue of my estate”) rather than try to break it down into individual amounts or items.
You may, if you wish, gift:
Property – either as an outright gift or to give someone only the use of it for a period, say, until they remarry with the instructions that once they have remarried the house is to be sold and the proceeds shared among other members of your family nominated by you
All your house contents (chattels) or individual items
Specific sums of cash – with or without an inflation adjustment
Specific investments
Businesses – either an outright gift or the first option to buy it from your estate
Residue i.e. what is left after all other gifts have been made and all your outstanding liabilities have been settled, including your testamentary expenses which are funeral costs, probate fees and if applicable Inheritance Tax.
You can specify exactly what you want to happen to your property. You can make “thank you” gifts of money. You can make gifts of personal belongings that are special to you and the person to whom they are given. You can make gifts to charities that are free of Inheritance Tax (death duties).
IHT reduction re gifts to charities. If you make gifts to charity of more than 10% of the net value of your estate then the IHT rate is reduced from 40% to 36% on the balance of your estate.
Can I make provision for my children (and future children)?
Yes. ‘children’, by legal definition, are your natural children, including illegitimate, plus any you have legally adopted. Stepchildren are not included in this definition so, if you wish them to be provided for, they need to be mentioned by name. If you have children at the moment and wish us to include others not yet born then we can include the wording “and any other children of mine not yet born”. If you don’t have any children at present but wish to include the possibility then again we can do that, however, it is wise to make further provision in case at the time of your death you don’t have any children.
Guardians. You can appoint Guardians to look after your young children. You can choose who you want to be your Executors and Trustees. Fundamentally, your Will is a record of your instructions on how you want your estate to be distributed and can, if you wish, include your directions regarding your funeral.
Does marriage, divorce or a civil partnership affect my Will?
In England, Wales and Northern Ireland, your Will is cancelled automatically if you marry or enter into a civil partnership after you have signed it unless the Will contained a sentence stating otherwise, for example if it had been drawn up just prior to you getting married. If you divorce or your civil partnership in annulled after signing your Will any gifts in favour of your wife, husband or partner will be cancelled (unless the Will states otherwise) and therefore your Will would be read as if they had already died. It is essential that you consider writing a new Will if there are major changes to your circumstances.
What happens if I leave someone out of my Will?
If you have not properly provided for any of your dependants who are unable to maintain themselves, or if you have not been fair to your wife, husband or civil partner (or even an ex-wife or ex-husband who has not remarried), the Court can alter your Will. Your reasons for not having provided for someone should be given in a separate letter, which can be referred to in your Will. The Court will consider these reasons but they will not bind them.
Do I need to change my Will if I have a Nil rate band or discretionary trust in my Will so that my children are protected?
The Government have recently changed the rules on Inheritance Tax and although not all of the terms have been finalised there is still much debate on this subject..
By introducing something called the “family home allowance” couples from 2018 onwards may benefit from increased tax allowances if their property is being inherited by direct descendants. A direct descendant is classed as the following:
Children
Stepchildren
Adopted or foster children
Grandchildren
A Discretionary Trust passes the property into a trust so in theory it may not benefit from the “family home allowance”. Details are yet to be announced by the government. By the time this “family home allowance” comes into force it will be worth an additional £175,000 per person. This will be added to the existing Nil Rate Band tax allowance of £325,000 per person. So each couple’s allowance will be £500,000 each – or £1m per household.
With inheritance tax currently at 40% of everything over the Nil Rate Band, this means that you could pay an additional £140,000 in tax if you still have a Discretionary Trust after 2020 and the rules do not allow for NRB Trusts to hold assets and still be able to claim full allowance. Our advice at the moment is to proceed with NRB trusts or FLITS as the executors and trustees have discretion at a later date to amend this if the new legislation means they would be exempt from claiming the higher ‘Family Home allowance ‘. It is also possible under a deed or instrument of variation to make changes to a Will in the future in line with new changes if the Testator was unable to amend their Will during their lifetime.
How do I ensure my children receive the same protection as a Discretionary Trust?
There are still many options available to you if you are worried about the possibility of your spouse or partner remarrying after your death and so disallowing any inheritance you plan for your own children.
There are a number of Trusts available through your Will that allow your family to benefit from the Family Home Allowance whilst still protecting your children from being disinherited.
These include:
Interest in possession (IIP) trusts
Disabled persons trust and IIP
Bereaved minor’s trust
Age 18 to 25 trusts
What should I do now to avoid missing out on the Family Home Allowance?
Most of our Wills state that the executors or Trustees have the power to over-ride any NRB trust if at the time of death this would cause any financial loss. And of course the Family Home Allowance only applies on second death not first so it may well be by the time the government have sorted out all the terms and conditions they will have allowed for NRB planning already in force in somebody’s Will. Even later conditions made in a Will can always be changed by a deed of variation if the trustees and beneficiaries all agree.
The best thing to do now is to book a review of your Will with one of our team to guide you through the process, and again make use of the Will for Life Scheme so that you don’t have to pay for new Wills all over again at a later date.
What are Executors?
One very important part of your Will is the naming of who you would like to act as your executor. Your executor is the person who will administer your Will after your death. They can be anyone you choose, for example:
Your husband, wife or partner
Your son or daughter (if over 18 at the time of your death)
Your brother or sister
A close friend
A beneficiary in your Will
(Professional) Society of Will Writers
As a courtesy, it is always best to ask the person whom you wish to appoint whether they are willing to act. The duties of an executor are varied and can be very time consuming. As a result, people chosen to be executors, when called upon to act, often appoint a professional to help.
What are Trustees?
Trustees are the people appointed in your Will to look after your property until for example, a child is old enough to inherit or where there is a life interest.
What’s the best way to provide for my disabled child?
Although not exclusively, a Discretionary Trust is often used by families who have a relative with a learning disability. Discretionary trusts are a way of putting in place financial arrangements to help support that relative. These trusts are particularly suitable for disabled people.
A Discretionary Trust can also provide a way of owning property. Sometimes families decide that in the long-term they would like to be able to set up arrangements that allow their relative to continue to live at home with the necessary support.
In summary, Discretionary Trusts are used:
As a way of paying for the things the statutory services may not be able to give, for example a holiday, a new coat or even additional care
As a means of owning, managing and maintaining a property
As a way of arranging an inheritance
So there is a way of managing money or other assets
To avoid benefits and care funding being stopped
Income Support – and possibly other benefits such as Housing Benefit – stops being paid if a person has more than a certain amount of money. Benefits are withdrawn or reduced until savings fall below the relevant level for the benefit. If Social Services fund a residential care place or care package they may also begin to charge for the care service or stop funding it. A Discretionary Trust can avoid this.
Once assets are put into the Trust they belong to the Trust not the person intended to benefit. He or she may get gifts or even payments from the Trust but they cannot be said to have any assets themselves. Trusts hold and invest assets. This can include the family home. It may provide a means of managing and maintaining a property. This is particularly useful when the person lacks legal capacity i.e. sufficient understanding to enter into a contract. Trusts are normally set up as part of drawing up a Will.
Trustees operate trusts. These can be other family members, friends or professionals. The key points about a Discretionary Trust are:
Trustees have discretion as to how the assets are used – the trustees are free to make all the decisions
The person to benefit from the Trust must not have a right to the income or capital
The intended beneficiary must not be the only person named in the Trust i.e. must not be the ‘sole’ beneficiary
Without these features the Discretionary Trust is not properly constituted and the person may be treated as though they own the house or have the money.
If you want to make some financial provision for a close relative who is dependent on welfare benefits and/or supported by Social Services do not say in your Will, “I hereby leave my worldly goods to Z”. This will not provide a long-term nest egg. Consider instead including in your Will a Discretionary Trust.
Can anyone witness me signing my Will?
No. They must not be a beneficiary in your Will nor married to a beneficiary. In England, Wales and Northern Ireland they must be over 18 years of age, of sound mind and not blind. You will need two witnesses who must both be present when you sign and date your Will. They don’t need to see the contents of your Will, only you signing it. In Scotland they must be over 16 years of age, of sound mind and not blind. You will only need one witness who must see you sign and date your Will. They don’t need to see the contents of your Will, only you signing it.
What should I do with my Will after I have signed it?
You should leave it in a safe place and ensure your executors and/or family know where it is being kept. Your Executors will need the original Will to apply for probate, not a copy. CJH offer a comprehensive service, which includes looking after your Will in our document storage facility. This saves your family distress from not being able to find your Will when you die because if it can’t be found it will be presumed not to exist. You can also have a Digital Vault where scanned copies of all your documents may be kept and this enable you to store certain information that may be pertinent and most useful to your Executors when they come to perform their duties. We are aware that most people wish to leave their executors with sufficient information with regard to their assets and liabilities to enable them to apply for probate as quickly and as easily as possible. Having all relevant information in a Digital Vault can achieve this.
What should I do if I have on-line bank accounts or others investments?
You should ensure that a full list of your assets are stored somewhere safe so that in the event you can not tell them in person your appointed officers will know how to manage your affairs or access your accounts when required to do so. Nowadays this could be money kept on accounts such as Pay Pall, Internet Banking, even Gambling accounts are very possible and without this information held nobody can access it later. A Digital Vault is an ideal way to store such information see details above.. This will save your family further distress from not being able to find your assets when you die – because again if they can’t be found they will be presumed not to exist.