What DIY Will Kits Don’t Cover
Writing a Will can seem like a complicated task. But with the right advice, and an expert to guide you, you can get a Will in place with just one meeting. IDR Member and Head of Legacy at Laurus; Abigail Bird talks through three key considerations when writing a Will that DIY services just don’t cover.
Consider the impact of Inheritance Tax
There are so many factors which affect the amount of IHT you have to pay. A lawyer can help you plan where your assets will go to make optimal use of the exemptions you are entitled to. For example, any part of your estate gifted to a UK domiciled spouse or civil partner does not use up any of your nil rate band. The nil rate band allowance is therefore “preserved” and can be carried over and combined with the surviving spouse’s nil rate band allowance allowing more assets to pass on IHT free on the second spouse’s death.
Other reliefs can include:
- Gifts to charities
- Gifts to certain political parties
- Exemptions for lifetime gifts, e.g. small cash gifts of £250 to an unlimited amount of individuals annually, wedding gifts
- Business or agricultural properties
Independent Financial Advisors can also advise on certain products which can further reduce your Inheritance Tax bill, so you can end up passing on much more to your loved ones.
Forget to include your digital assets
According to Decrypt, almost 4 million Bitcoin have been lost forever – that’s 20% of the 18.5 million Bitcoin that have been minted so far. Bitcoin, cryptocurrencies, or any digital assets, such as photos or documents, can become irretrievable once you pass away without the correct protection.
A letter of wishes can be produced alongside your Will. Unlike a Will it is never on the public record, and can be updated at any time, making it a great option for recording where your assets are held, and instructions on retrieving them. You should never put sensitive information such as passwords and account numbers in your Will, so a letter of wishes is a great option.
Consider setting up a Testamentary Trust
Trusts essentially allow someone, for example, your child, to benefit from assets without being the legal owner. A Will Trust, or Testamentary Trust, forms part of your Will and allows you to set aside assets to be managed by a trustee. This will only take affect after your death, unlike other kinds of lifetime trusts. The Trustee will look after the assets on behalf of your beneficiaries, who will receive the benefit of the trust, for example, by living in a property or having cash advancements from the trust used for payment of their education.
The benefit of setting up Testamentary Trust, as opposed to leaving the assets outright to someone in your Will, is that you have more control over how the assets are used. You can set out conditions for how the trustee should manage the assets – for example, allowing someone to receive a set amount of money from your estate per year.
So, for example, if you have an investment portfolio, and wish for the income and dividends to be used by your surviving spouse, but the capital of the investment portfolio to ultimately be left to your child, you can set up a Life Interest Trust which will ensure your assets will be passed on as per your wishes when your spouse passes away. It is a way of preserving the capital for your children whilst ensuring your surviving spouse can benefit from the asset during their lifetime.
There are plenty of other considerations when putting your Will in place so you can get maximum protection. With an experienced legal team, you can get this protection in place in less than 30 days from instruction.
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