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Making a will - part two
Here is the second part of our essential guide to making a will, edited by Paul Lewis
Who else do I need to involve?
Once you have decided who will write your will, you need to think who else will have to be involved. There are three roles for family or friends.
Executors
The executors are the people who administer your estate after you die and make sure your wishes are carried out. An executor can be your partner, a close friend, or a professional advisor. In many cases the executors are the main beneficiaries of your will. Make sure the people you choose are able to do the administrative tasks required. If you do ask a solicitor or bank to be an executor they will charge a fee – often quite a high one – so if you have relatives or beneficiaries who can do the job that will be better for your heirs. Apart from collecting all the information ad valuing your property, the executors usually take on the role of being trustees if there are beneficiaries under the age of 18 or if your will sets up trusts.
Guardians
Everyone with young children should make a will. As a parent, you can indicate who you think should be appointed as guardians of your children in the event of both parents dying. The Courts will take your views into consideration.
In your will you can make provision for your children and decide at what age they can inherit. Children cannot inherit until the age of sixteen in Scotland and eighteen in the rest of the UK. If you die before they reach that age then they would inherit any money or property left to them at that age. You may think that this is too young and may want the money held in trust for them until the age you think is appropriate. But recent changes in the law mean that there may be extra tax to pay if you delay a child’s entitlement until after the age of 18. You will need professional advice to make this decision.
Witnesses
To be valid a will has to be witnessed.
In Scotland, a will has to be signed on every page by the person making the will and one independent person must witness their signature on the last page. The witness must be over 16 and should not be related to the testator or be a beneficiary of the will.
In England, Wales and Northern Ireland the person making the will (the testator) must sign it on the last page and two independent people must witness the signature. Each witness must be over 18 and cannot be a spouse or civil partner of the testator and cannot be a beneficiary under the will. The same rule applies to what is called a ‘codicil’ or addition to a will.
The firm of solicitors usually arranges witnesses if you sign it on their premises. Or if you are at home a neighbour or friend could be a witness. All they do is witness your signature. They have no other responsibilities and do not see the contents of the will.
What do I need to do to prepare in advance?
Next, you should prepare a list of the information you will need.
Contact details
Note down your own contact details – full name, address, and those of your partner, children, and any other beneficiaries of your will. Dates of birth can help identify people and are essential for beneficiaries under the age of 18. Write down the name and address of your executors and guardians.
The contents and value of your estate
Next you must write down what you own – your assets. Write them down in a list and estimate their approximate value. Then decide who you want to leave them to. Next list your liabilities – any debts you have or unpaid bills including any tax that may be due on your income but not yet collected. Then work out the value of your estate which is simply the value of your assets minus your liabilities. Or more simply – what you own minus what you owe. The will planner below can help you do this.
Will Planner
First list your major assets (what you own)
A. Assets
Your home. If you own in joint names, do you know how you own it? In some cases you will own half of it. In others you will be joint owners with your spouse of partner. The way you own it will affect your freedom to leave your share:
Other property or land
Home contents, including furniture and fittings
Items of particular value for example jewellery, art, and valuables
Money in bank and building society current and savings accounts or cash ISAs
Investments such as shares, National Savings, Premium Bonds, unit trusts, equity ISAs etc.
Insurance policies and pensions
Your car or other vehicle
Any other assets
Make sure you note any assets you own jointly with a spouse or partner as they can pass directly outside your will.
Put a value on all these assets – or your share of them and put the total here
Assets A = £
Then list your major liabilities (what you owe)
B. Liabilities
Your mortgage (or share in it). Is it covered by life insurance? If so on your death it may be paid off. Is that life insurance written in trust (better if it is) or will it form part of your estate?
Loans and overdrafts
Credit card debts
Credit or hire purchase agreements
Other liabilities such as income tax which may be due in future
Add up the total and write it here
Liabilities B = £
Then work out the value of your estate A – B = £
Bequests (gifts)
Next you have to decide you want to benefit from your estate. They are called the beneficiaries and what you leave them are called bequests or gifts. You can leave any amount to any number of people. You must also decide what you want to happen to your bequests if any of your beneficiaries die before you do. In Scotland, a spouse or civil partner and your children have rights to inherit some of your property whatever you put in your will.
Gifts are divided into four types:
Specific: a particular item such as a painting or an item of jewellery or furniture or indeed a house or a piece of land. Write down the full names and address of those you would like to benefit with a clear brief description of the item.
Pecuniary: a fixed sum of money. Write down the full names and address of all individuals and charities (with registered charity numbers) you would like to benefit and the amount you want to leave them.
Residuary: After you have made gifts of specific items and amounts of money, and your debts have been paid, the rest of your estate is called ‘residuary’. You can leave all of that to one beneficiary or a percentage of it to a number of them. Write down the full names and address of all individuals and charities (with registered charity numbers) you would like to benefit and their proportion of the residue of your estate.
Reversionary: a reversionary gift (known in Scotland as a “liferent”) is more complicated. You allow someone to have the use of something for their lifetime but when they die it passes to someone else you specify. For example, you may leave a house to the person who is living in it for their lifetime but wish your children to inherit it on that person’s death. Write down the full names and address of all individuals and charities (with registered charity numbers) you would like to benefit.
Charitable Legacies
Legacies to charity amount to more than £1 billion a year. It is a painless way for you to support something you believe in. Legacies to charity are free of inheritance tax, though obviously it will leave your other heirs with less money than if you did not make the gift.
You can either leave a fixed sum (known as a Pecuniary Legacy), or part or all of your estate once all your other gifts have been distributed (known as a Residuary Legacy). For example after you have left the bulk of your estate to your family and friends, you could leave 5% of your estate to a named charity.
Approve your will
Once your solicitor has drafted your will, they will send you a copy to approve. Any changes can be made at this point. Legal language is peculiar so ask questions about anything you do not understand. Once you are happy that the document reflects your intentions, your solicitor will ask you to sign it in the presence of witnesses.
Keeping your will secure
You can either keep your will at home or some solicitors or banks are may offer to hold it in their strong room. There are not usually any charges for this service.
Don't forget to let your family know where it is and if it is at home make sure it is safe.
Once you die
After your death a legal process called probate is carried out to establish whether your will is valid. A grant of probate is then issued to the executors of the will to enable them to administer the estate. In Scotland, probate is called an application for confirmation. After that formal stage, your executors then get your estate valued and carry out your wishes as expressed in the will.
If you have not left a will or it is invalid for some reason then an administrator is appointed by the court to settle your affairs according to the laws of intestacy. In Scotland the court appoints an executor. This can add to the timescale and costs of administration. In most intestate cases in Scotland, you also need to apply for what is called a Bond of Caution. That is an insurance policy for which the premium can run to several hundred pounds even in a small estate.
Further information
This guide is sponsored by Will Aid – which gives money to nine charities - www.willaid.org.uk
Institute of Professional Willwriters - www.ipw.org.uk
The Society of Will Writers - www.thesocietyofwillwriters.co.uk
The Law Society - www.lawsociety.org.uk
Law Society of Scotland - www.lawscot.org.uk
The Law Society of Northern Ireland - www.lawsoc-ni.org
Explanation of legal words
Administering the Estate: the process of gathering together all the estate assets, paying off the debts, and passing on the remainder to those entitled to it.
Administrator: the person who obtains letters of administration of the deceased’s estate, if the deceased died without a valid will – intestate. A woman is sometimes called an administratrix.
Assets: all the property in the estate.
Attestation Clause: the formal part at the end of a will, where the person making the Will and the witnesses sign. In Scotland, this is known as a “Testing Clause”.
Beneficiary: someone who receives a benefit under a will or intestacy.
Bequest: a gift of personal property. (See: Legacy)
Bond of Caution: Insurance policy usually required in Scotland when someone dies without a will.
Codicil: a legal document adding to or altering an existing will.
Confirmation: the process of administering an estate in Scotland is called an application for Confirmation. (For rest of UK see Probate)
Crown or Treasury: The Government. Where your money and property go if you have not made a will and have no next of kin.
Estate: the total value of everything you own at death less any outstanding commitments. All the assets therefore which can be disposed of under the will or which pass under an intestacy. Jointly held assets that pass by survivorship automatically to the other joint owner and “nominated” assets do not form part of the “estate”.
Executor: a person appointed by the deceased in his or her will to deal with the estate after death. A woman is sometimes called an ‘executrix’.
Grant of Probate: the legal document issued to the executors of a will after someone’s death, which enables them to administer the assets.
Guardian: a person or persons chosen by the testator to look after their minor children in the event of their death.
Inheritance Tax: a 40% tax payable on estates worth over £285,000. Legacies to charities are free of tax.
Intestacy: the rules that dictate the distribution of an estate when an individual dies without having a valid will.
Intestate: a person who dies intestate, dies without making a valid will.
Issue: your direct descendants such as children, grandchildren, great grandchildren and so on.
Joint Assets: property owned by two or more people. They may own it as “joint tenants” which means they both own it all or as “tenants in common” which means they each own a named share – usually half each. In Scotland they use the much more sensible terms “joint owners with survivorship” and “joint owners”.
Joint Tenancy: property owned jointly with another person. In the event of the death of one tenant the survivor becomes the owner of the property absolutely without the need to leave it in the will. In Scotland called “joint ownership with survivorship”.
Legacy: a gift left in a will (also called a bequest) It can be...
• Specific: a gift of a definite object or property.
• Pecuniary: a gift of a specific sum of money.
• Residuary: a gift left when other legacies and expenses have been paid
• Reversionary: a gift to someone for their lifetime which after their death goes to someone else
Probate: the legal process to establish whether your will is valid and the legacies can be distributed as specified. In Scotland called ‘confirmation’.
Residue: the assets left in the estate after all the debts, liabilities and specific gifts have been paid.
Specific Gift: a gift in a Will of a particular thing or things, such as “my grand piano”.
Tenants in Common: a form of ownership by two or more parties whereby if one of them dies, their share of the property forms part of their estate and does not automatically pass to the other party. In Scotland called “joint ownership”.
Testator: the person who made the will. A woman is sometimes called a testatrix.
Trust: a legal arrangement, which can be made in your will to administer part of your assets after your death.
Will: a legal document that sets out the wishes of the testator for the distribution of his or her estate and certain other matters after death.
Witness: a person who witnesses the testator’s signature on a will.
England, Wales, N. Ireland
A: If you are married or in a civil partnership
(1) If you leave less than £125,000 in your sole name then the surviving spouse will get everything.
(2) If the assets in your sole name are more than £125,000 but there are no children, grandchildren, parents or brothers and sisters or nephews and nieces, then the surviving spouse will get everything.
(3) If you have children, then your surviving spouse will get the first £125,000 and the personal chattels (personal possessions) and the remainder will be divided two ways. Your spouse will get a life interest in half the remainder. A life interest means that they will be entitled to the income on that half for their lifetime and on their death it would automatically pass to your children. The other half will be divided between your children when they reach 18 (England and Wales) or 16 (Scotland).
In Northern Ireland, the amount the surviving spouse receives depends on the number of children:
If there is one child, the surviving spouse receives the first £125.000 of the residuary estate plus chattels.
If there is more than one child, the surviving spouse receives one third of the residuary estate and the remainder to the surviving children in equal shares.
(4) If you leave no children but have surviving parents or brothers and sisters, then the surviving spouse will get the first £200,000 and the personal possessions. The remainder will be divided two ways. Half will go to the surviving spouse, and the remainder will go to your parents. (In Scotland, any brothers and sisters will share half with your parents). If there are no surviving parents, then it will be divided between any brothers and sisters. If a brother or sister has died before you, their share goes to their children.
B: If you are not married:
If there are children it will be divided equally amongst your children.
If there are no children but you have surviving parents then everything will go to your parents. In Scotland, half will go to your parents and half to brothers and sisters.
If you have no surviving parents, then everything will go to your brothers or sisters.
If you have no surviving parents or brothers and sisters then your assets will go to any surviving grand parents.
If you have no surviving parents, brothers and sisters or grand parents then it will be divided among uncles and aunts.
In Scotland, if you have no surviving blood relatives, including grandaunts, granduncles and then grandparents, then the estate will go to the Crown.
In England, Wales and N. Ireland, the Crown gets the money if you have no grandparents or their descendants (i.e. uncles, aunts, cousins, siblings, nephews, nieces, etc).
In Scotland
In essence the rights of a spouse in Scotland fall into two broad areas (a) prior rights which are to: - an interest in the house up to a value of £300,000 (i.e. the deceased's interest), furniture and personal effects up to a value of £24,000 and cash of either £42,000 if children and £75,000 if no children; and (b) legal rights, these are to: - a one half share of the moveable estate if there are no children and a one third share of the moveable estate if there are children. "Moveable estate" means the estate of the deceased excluding what in Scotland is termed "heritable property" and elsewhere would be known as real property i.e. land or buildings.
* This article summarises UK law as at November 2006. It is for general illustration purposes and is not intended to constitute or replace professional legal advice. Written by Sue Davison, Will Aid, Peter Cooke, Stones solicitors, Taunton, Nick Barclay, Thorntons solicitors, Dundee.
Edited by Paul Lewis.
This article was created: 17 November 2006.
This article was last edited: 30 April 2007.
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