What to consider
You will need to appoint people you trust, called Executors, to carry out the terms of your Will. Appoint guardians to look after minor children under 18 years of age.
Name those you wish to benefit from your estate with specific items or fixed sums of money.
You may also wish to create Trusts to help preserve wealth for future generations, protect against residential care costs or help vulnerable or disabled beneficiaries.
You can also state your funeral wishes.
An executor is a person(s) named in a will, who is given the legal responsibility to take care of a deceased person’s remaining financial obligations. This means taking care of everything from disposing of property to paying bills and taxes.
If you leave something to a person in your will, they can still be your executor – but they can’t be one of your will’s official witnesses.
Above all you must choose somebody you trust. It’s going to be up to them to follow the instructions in your will and to find fair solutions to any disagreements. If your executor’s good at paperwork and managing legal issues it will be helpful.
If there’s someone in your family who you think will handle the job well, it can be a good idea to have them as an executor. For example, it’s very common to name one of your children, a niece or nephew or an adult grandchild.
Make sure you ask if they’re happy to do the job before you write your will, though – if they say no, you’ll have to get your will changed. Think carefully before choosing your husband, wife or partner as your only executor. They’ll be dealing with your death, and by naming somebody else to be an executor with your husband, wife or partner, you can at least take the burden of the paperwork off their shoulders.
Acting as the Executor of a Will can be a very daunting prospect because the role carries with it a considerable amount legal, tax and administrative responsibilities. An Executor’s responsibilities last for the duration of the administration of the Estate and can also carry on into any ongoing Trust.
A legal guardian is appointed to care for a child in case both parents die before the child reaches the age of 18. You should appoint a guardian(s) for your children in your Will or the courts will do it for you if the worst happens.
The guardian(s) will make important decisions about your children’s life in areas such as medical treatment and education and will directly affect how your children are schooled, how they are
taught the difference between right and wrong and how they are supervised during their lives up to adulthood.
What to consider when deciding who to appoint
Who is most able to take on the responsibility of caring for a child – emotionally, financially and physically?
Whom do your children feel comfortable with already?
Whose parenting style, values and religious beliefs most closely match your own?
Would the person have enough time and energy to devote to your children?
Would your children have to move far away and would that pose a problem?
Does the person you are considering have any other children? If so, would your children fit in or get lost in the shuffle?
Finally, ask yourself ‘can I live with that person taking care of my child’ If your inner voice says no – keep thinking.
Do discuss the appointment with the person you choose and find out if they feel they can take on this responsibility.
How will the guardians manage for money?
A guardian has no obligation to support your child from their own resources. There are a few different ways to approach this issue when making a Will.
Following the death of both parents, most Wills leave the residuary estate on trust for the children. The executors, as trustees, usually have powers to use money held on trust for the benefit of the children or to pay it to the guardian(s) to be used for the children’s benefit.
Parents may include in their Will a power for the trustees to loan money to the guardians.
Parents may wish to leave a cash gift to a guardian(s) that is conditional upon the acceptance of the appointment as a simple thank you, or the cash gift may be intended to enable the guardians to improve their home to accommodate the children.
The parents can write a letter of wishes making clear how they would like the trustees of their Wills to use their powers to provide financial support for the children.
Legacies and beneficiaries
Gifts of specific items, money and charitable donations.
Residue of the estate
Everything that is not included above after debts, funeral expenses and Inheritance Tax has been paid.
Inheritance tax (IHT)
Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died. There’s normally no Inheritance Tax to pay if either:
The value of your estate is below the £325,000 threshold
You leave everything to your spouse or civil partner, a charity or a community amateur sports club.
If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren, your threshold will increase to £425,000. If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £850,000.
Inheritance Tax rates
The standard Inheritance Tax rate is 40%. It’s only charged on the part of your estate that’s above the threshold.
Your estate is worth £500,000 and your tax-free threshold is £325,000. The Inheritance Tax charged will be 40% of £175,000 (£500,000 minus £325,000).
For couples living in England and Wales, there is a way to protect at least half the value of the family home and keep it for the children. This is achieved by writing your Will in such a way that it puts half the family home into a type of Trust when the first spouse or civil partner dies. The terms of the Trust also mean that the surviving spouse or civil partner can continue to live in the property held within the Trust. These are called Property Trust Wills.
By preparing a Property Trust Will in the right way, the value of half the home is ring-fenced by the Trust so that it isn’t taken into account if the surviving spouse is financially assessed for residential care home fees. The reason is because half of it is owned by the Trust and the other half is owned by the surviving spouse or civil partner.
Disabled Discretionary Trust
A trust is the best way of financially providing for a disabled or vulnerable person throughout their lifetime. A Trust allows for assets (such as property, cash and investments) to be held by trusted individuals (known as Trustees) for the benefit of others, in this case a disabled or vulnerable person (known as the beneficiary or beneficiaries). It is the Trustees who decide how to use the assets for the benefit of the beneficiaries and they will be governed by any rules set out in the Trust document.
A trust can be set up to meet your individual circumstances and the needs of your family. A disabled persons trust is a trust set up to specifically to benefit a ‘disabled person’. We recommend that you get advice from a trusts expert to help you consider whether putting in place a disabled persons trust may be appropriate in your circumstances.
Consider DIY/online, a legal professional
or a solicitor to put a Will in place.