Peace of mind and clarity for your loved ones during challenging times
Preparing a Will is an important step in ensuring that your assets are distributed according to your wishes after your death. It offers peace of mind and clarity for your loved ones during challenging times.
However, writing a Will requires careful consideration of what you own and how you wish to distribute it.
Assessing your assets and liabilities
The first step in preparing your Will is to take stock of your possessions. Think carefully about everything you are likely to own at the time of your death, from properties and money to personal belongings and even pets. Your estate includes all your belongings, which will need to be distributed according to the instructions in your Will.
Before any distribution to beneficiaries, it’s crucial to remember that all debts, outstanding mortgages and funeral expenses must be settled. Even funds in a joint bank account, while they pass automatically to the other account holder, cannot be passed on to someone else through your Will.
What may be included in your estate
Your estate might consist of various types of assets. These can include homes, savings, pension funds and even investments.
Below is a list of commonly included estate items to ensure you don’t overlook anything:
Properties, including your main residence or any other owned properties
Money held in bank or building society savings accounts
Insurance policies, such as life assurance or endowment plans
Pension schemes with lump sum death benefits
National Savings, such as Premium Bonds
Investments, including stocks, shares, ISAs and investment trusts
Vehicles, such as cars, motorbikes or boats
Jewellery, antiques or other valuable personal belongings
Furniture and household items
Liabilities can significantly affect the overall value of your estate.
Here are a few to consider:
Outstanding mortgages or equity release plans
Credit card balances requiring repayment
Overdrafts or personal loans
Joint ownership and protecting loved ones
Jointly owning property or assets with a spouse or registered civil partner can be an effective way to ensure their financial security. For example, if you hold a joint bank account, the surviving partner automatically retains access to funds. This kind of arrangement helps ease financial concerns during an already challenging period.
Joint ownership works in two distinct ways in the UK. Understanding these distinctions can help avoid potential conflicts when planning how assets should be distributed.
Tenants in Common vs Joint Tenants Explained
Tenants in Common (Common Owners in Scotland)
Under this arrangement, each owner retains a defined share of the asset, which could be divided equally or unequally. This is particularly useful as you can clearly specify in your Will who should inherit your share of an asset.
Joint Tenants (Joint Owners in Scotland)
This arrangement differs as all owners share total ownership equally. When one owner dies, their ownership share automatically passes to the surviving owner(s). It’s important to note that you cannot leave your share to someone else in your Will under this arrangement.
Risks of intestacy
Failing to review or create a valid Will can result in your estate being subject to intestacy laws. Intestacy occurs when there is no valid Will, or the Will fails to cover all assets. While you may have expressed informal wishes, the absence of legal documentation may lead to unintended consequences.
Partial intestacy arises when a Will exists but doesn’t account for all assets. This highlights the importance of reviewing and updating your Will when significant life events occur, such as births, deaths, marriages or divorces. Revisiting your Will ensures all assets are covered and distributed accordingly.
Reviewing your Will regularly
Creating a Will isn’t a one-time event. Circumstances change, and as they do, your Will should evolve with them. By keeping it updated, you ensure completeness and accuracy, reflecting your true intentions as time goes on.
Take time to revisit your Will periodically or after life-changing events, and consult with a professional to ensure it remains valid and effective.