If you have children, it is always recommended that you have an up-to-date, valid Will in place. We take a look at some of the main reasons that this is so important.
While the main reason for making a Will is to make sure that you pass on your wealth to your choice of beneficiary, it also offers other advantages, particularly to those with children.
Appointing a guardian
If you have children aged under 18, you can use your Will to appoint a guardian to look after them, should anything happen to you and their other parent. Without this, it would be down to a court to decide who would care for them, and the court might not choose the individual or individuals you would have picked.
While it is very difficult to think about this sort of scenario, by making adequate provisions for every eventuality, you will have the peace of mind of knowing that you have done what you can for your family.
Appointing a trustee and deciding on the age of inheritance
You can also decide at what age you would like your children to inherit your estate. This does not have to be 18, in fact, it is often advisable to choose an older age, such as 25, as 18 is still quite young to inherit a large sum.
You can use your Will both to specify the age of inheritance and to appoint trustees to manage the money in the meantime. You can leave your trustees instructions as to how you would like funds to be dealt with. For example, you could specify that you would like money to be released for your children’s university education.
Deciding who to leave your estate to
Having a Will written means that you can make a conscious decision about who to leave your assets to. Without a Will, your estate would be passed on to your next of kin under the terms of the Rules of Intestacy.
By way of example, if you are married with children, your spouse will inherit the first £322,000 of your estate, plus all of your personal possessions. The remainder will be divided in half. Your spouse will receive one half and your children will share the other half equally. This means that your children could receive substantially less than your spouse, which might not be what you want to happen.
Under the Rules of Intestacy, cohabiting partners and step-children do not receive anything. This means that if you want to leave anything to a step-child, you must make a Will, or they will be excluded.
Inheritance Tax and estate planning
Making a Will also gives you the opportunity to structure your estate in the best way to minimise Inheritance Tax and pass on your assets in the most effective way possible. For example, if you are not married, Inheritance Tax would be payable on anything you left to a cohabiting partner. If this money is in turn left to children, Inheritance Tax would be payable a second time. By leaving the money directly to your children, you could avoid the need for the tax to be paid twice.
If you have remarried
If you have remarried, any existing Will usually becomes invalid unless it was specifically made in contemplation of the marriage. This means that if you do not make a new Will, your estate will pass under the Rules of Intestacy, with your new spouse receiving the majority of your assets. It would then be open to them to leave the money elsewhere, for example, to their own children or to a new spouse.
If this is not what you want, you should make a Will setting out the provisions you wish to apply, for example, leaving money to children from an earlier relationship.
Deciding who will have heirlooms
Your Will is also an opportunity to pass on individual items of value to your children. This will ensure that they receive what you would like them to have and can also prevent disagreements from arising.