Future Planning

I have decided to write this post and it was one of my dearest friends who suggested I blog about this last year. It is important to emphasise the need to write a will to safeguard your family especially if you are living together as a couple and have children.

I used to always tell my parents to spend any money they have as there will be less left for the family to fight over. I say this as a joke all the time, but for some families this is a reality. The quote "money is the root of all evil" springs to mind even the closet of families can fall out when money is involved.

Disputes over a loved ones’ estate have been known to lead to family disagreements. To avoid this, it is always best to have a will in place. Have clear instructions as to what you want to have happen to your estate. Remember without a will your estate will be distributed according to law and this may not consider your personal wishes.

In September 2019, the Remember a Charity survey found 68 per cent of UK adults hadn't made a will - equivalent to 27.8million people. Some 47 per cent of over-55s had failed to arrange one.

Why you should have a will if you are a parent

It is so important to have a will in place especially if you have children. It might be the last thing that you want to think about, but making a will is particularly important, you should consider appointing a guardian for your children.

What is a guardian?

A guardian is the person legally responsible for looking after your children if you die before they turn 18.

If you don't choose a guardian, the local council will be involved in deciding who your child should live with. While they normally look to the immediate family, this is not always automatic. A guardian will have the legal authority to make decisions on behalf of your child with re: their upbringing, including decisions such as who your child will live with and where they will go to school. This is known as “parental responsibility”. The appointment of a guardian will end when your children reach the age of 18.

Some people believe to have a will in place comes at great cost, however there are several schemes including donating to charity.

Many charities offer fee-free will-writing by solicitors. In return, they hope you'll donate or leave a bequest in your will (leaving them something when you die) – though you're not obliged to.

These schemes normally run during months of the year (notably March, October, and November).

An example of one is below:

The Cancer Research UK Free Will Service allows over-18s to get a free simple will. If your affairs are complex, e.g., you have children from a previous relationship, you might need a more comprehensive will. Or they can update an existing one.

The service is available over the phone, online or face-to-face with your nearest participating solicitor. Find out more by following the link above or by phoning 0300 123 7733.

There are also low-cost companies who provide a will service online. This company charges £39.50 for one or £49.50 for two (covers England and Wales) and is a member of the SWW (Society of Will Writers). Its wills are checked by a solicitor Members of SWW have indemnity insurance.

Legacy Wills & Estate Planning makes writing a Will a simple process which is easy to understand, basic Will writing service starting from only £19.99, they also provide a free quote.

https://www.legacywills.co.uk/

Trade Unions

Several trade unions also provide a free wills service please see examples below.

• Unite
• Unison
• GMB
• NASUWAT Teachers union

What happens if you die without a will? (this is called intestate)

Order of inheritance

If you die without a will, in England or Wales, below is the order in which family will inherit your estate:

• Spouse or civil partner
• Children/grandchildren
• Parents
• Brothers and sisters
• Grandparents
• Uncles and aunts

(‘Children’ includes illegitimate and adopted children, but not step-children.)

If you’re married or in a civil partnership

If your estate is valued at less than £270,000, your spouse or civil partner will inherit everything.

If it’s worth more, who gets what will depend on the overall value of your estate. It will also depend on whether you have any other surviving close relatives (like parents, children, siblings, or grandchildren).

If your estate worth over £270,000 this is how it could be divided up:

If you have children

Your spouse or civil partner will get:

• Your personal possessions
• The first £270,000 of your estate
• Half of anything left over

Your children will get the other half of anything left over.

If you don’t have children

Your spouse or civil partner will inherit everything.

Single and have children

If you have surviving children but aren’t married or in a civil partnership, your estate will be divided equally between your children.

Your partner (and any of their children from a previous relationship) won’t be entitled to anything.

If your children aren’t alive when you die, your grandchildren or other descendants will inherit.

If you’re single and don’t have children

Your estate will be shared equally between your next closest blood relatives.

These are, in order of priority:

• Parents – this does not include step-parents.
• Siblings – or your half-siblings.
• Grandparents – this does not include step-grandparents.
• Aunts or uncles – if you don’t have full aunts or uncles, your half-aunts, or uncles.
• First cousins

If you don’t have any blood relatives, your estate is passed to the Crown.

You should be aware that anything over £325,000 may be subject to inheritance tax.

What is inheritance Tax?

IHT thresholds and rates 2020-21 everyone has a tax-free inheritance tax allowance of £325,000 – known as the nil-rate band. The allowance has remained the same since 2010-11. The standard inheritance tax rate is 40% of anything in your estate over the £325,000 threshold. You can find more information in relation to this below.

https://www.which.co.uk/money/tax/inheritance-tax/inheritance-tax-thresholds