When it comes to estate planning it’s important to take time and care to ensure that you have a robust Will and the right documents in place to protect you, your Estate and your beneficiaries.
Why making a Will is a crucial stage of Estate planning
Your Will is one of the most important documents you will ever need to set up. It works as your ‘voice’ after you die ensuring that your Estate passes on smoothly and tax-efficiently to the people who you want to inherit. It can also be used to help you make sure that any of your final wishes are properly carried out. In the UK, if you don’t have a Will you will die ‘intestate’ with your Estate divided by the rules of intestacy. As a result, your assets might not go to those who you’d like them to pass.
What’s included in a Will?
There are several sections which are likely to be included in your Will:
Executors – you will need to name two or more individuals to act as your Executors. These people, usually trusted friends or relatives, will take responsibility for managing your affairs and distributing your Estate according to the terms of your Will. You can also appoint a professional Executor, which can be a useful step given the duties and responsibility which the role involves.
Funeral wishes – you can detail any funeral preferences including where you’d like to be buried or a location for your ashes to be scattered. We would suggest that more detailed plans, such as any important readings or music you’d like read or played be included in a separate letter of wishes to be kept with your Will. Don’t forget to share these plans with your family too.
Guardians – if you have young children, aged under 18, you should name a legal guardian for them. Do make sure you speak to those who you are naming before drawing up your Will as taking on a legal guardianship is an enormous undertaking.
Beneficiaries – you will need to specifically name those who you want to inherit your Estate. This can be family members, friends, charities or other organisations. It’s a personal decision who to leave your Estate to, but it’s advisable to speak with close family concerning your wishes to avoid any confusion or upset when the time comes.
How to value your Estate
As you begin to consider your plans, it will be important to understand the value of your Estate. The simple way to do this is to make a note of your assets and liabilities. Your assets are likely to include any property you own, as well as savings, investments and personal items including jewellery. It might be useful to seek professional valuations so that you have an up-to-date record. Your liabilities might include a mortgage and other debts including overdrafts or loans. A simple calculation of assets minus liabilities will give you an indication of the size of your Estate.
Signing your Will
Under the law of England and Wales, for your Will to become valid it must be signed by you, in the presence of two independent witnesses who must be in each other’s presence when they sign. These witnesses cannot be beneficiaries of your Will or your Executors.
Supportive documentation for your Will
In today’s digital age it makes sense to consider your online presence alongside your Will. A list of your accounts, passwords, usernames and security questions should be retained, ensuring your family have access to this information when needed. Without this information your heirs or Executors may be unaware of your accounts or struggle to access them.
Any details about your digital assets should not be included within your Will, which will become a public document after your death. As a result, anyone would be able to access it and the information in it. So, it’s more sensible to keep a copy with your Will or at least let your Executors know where it is – this allows you to keep your checklist updated without having to change your Will every time you change a password.
You can also write a letter of wishes to be kept with your Will, which can refer to your funeral preferences, as noted above.
Inheritance Tax implications of your Estate
One of the key areas to be aware of with Estate planning is Inheritance Tax, which is charged on your Estate when you die. It’s vital to take steps to plan for Inheritance Tax as the rate charged stands at a staggering flat rate of 40% so it can significantly impact your Estate’s value and the amount which your beneficiaries inherit.
There are certain allowances which apply – every individual has an amount (called the Nil Rate Band) at which Inheritance Tax won’t be relevant. Forward planning, and using various allowances available, can help you reduce Inheritance Tax, or even remove it totally but it’s important to work with a specialist adviser to ensure that your plans are properly put in place.
Support for Wills and Estate planning from The Fry Group Dubai
Setting up your Will is usually a straightforward process and can offer real peace of mind for you and your family. We can help you with all of the formalities, and guide you through the questions you need to ask yourself to consider all the information you need to include. Please contact your nearest office to speak to one of our experts.
Would you like to find out more?
We are here to help with your tax planning requirements. For more information, whatever your circumstances, please contact us today.