By This Is Money 10:09 GMT 05 Jan 2007, updated 09:48 GMT 19 Jun 2008
Now one likes to talk about death, especially their own. But if you don’t make plans on how you want to distribute your worldly wealth while you’re still alive, you can leave a host of problems and hardships for your grieving family sort out.
Take the billionaire aviator turned recluse, Howard Hughes. It took 15 years of legal wrangling before his fortune was handed out among surviving family members because he hadn’t bothered to make a will.
Maybe he, like many other people, felt daunted or even afraid by the process – or was it the cost?
But in reality, the business of making a will can be quite straightforward and it won’t cost the earth provided you are aware of the major pitfalls.
Here are our top ten tips on how to end up with the perfect will.
1. Choose who draws up your will wisely You can make your own will using a DIY kit available from the local stationers but the process is full of pitfalls and errors are easy to make. Lawyers make a lot more money sorting out badly drafted wills and dealing with claims against those wills, than they make for drawing up wills. DIY is OK for home improvements, but, unless you’re extremely confident and knowledgeable, it’s not for wills.
2. Choose your executors well Executors are responsible for exercising your estate in accordance with your instructions after you have died. It is a responsible and demanding role, and involves handling large sums of money. And don’t forget to check that the people you choose are happy to take on the role.
3. Appoint a default or substitute executor If you are married, you will probably want your spouse to be your executor, but don’t appoint them as your sole executor.
If you both died together in a plane crash or a car accident, neither of you would have an executor living. Always appoint a default or substitute executor as a fall-back position in case your spouse is unwilling or unable to act.
4. Appoint guardians If you are the last living parent and you die leaving children under age 18, a guardian will be appointed by the court if you have not specified who this should be in your will. If you are unmarried but you and your partner have children, you might not even get guardianship of your children. If an unmarried man dies, his female partner automatically gets guardianship of their children, but if an unmarried woman dies, her male partner does not. You should appoint each other as guardians in your wills to overcome this problem.
5. Appoint trustworthy trustees This might sound obvious, but if you are setting up a trust in your will or if your beneficiaries could be aged under 18 when you die, you will need to appoint trustees. Trustees will be responsible for managing and investing money, or looking after property until it passes to the beneficiaries, so make sure they are people with a good grasp of financial matters – and that they are still young enough so they don’t die before you do.
6. Make specific legacies If you want to preserve family heirlooms or items of special sentimental value, (for example, a grandfather clock, or a wedding or engagement ring), you should leave these items as a specific legacy to a named beneficiary.
7. Make sure you leave a residual legacy The ‘residue’ is what is left over in your estate after you have made any specific legacies. You must specify who this goes to, as if you fail to do so, you will create a partial intestacy in your will. In other words, the small gifts and legacies would pass according to the will, but the residue would be subject to the laws of intestacy.
8. Save tax with a trust Inheritance tax is becoming a burden for many families, particularly where the value of a property pushes the value of an estate above the nil rate band for inheritance tax. If you are married, you can include a discretionary trust in your wills, which could save your children more £110,000 in inheritance tax at current rates.
9. Sign your will It’s all very well having your will drafted, but if you don’t sign it in front of two independent witnesses, it will not be valid. A witness cannot be anyone mentioned in the will or anyone married to anyone mentioned in the will.
10. Get it stored safely Once your will has been correctly signed and witnessed, have it stored in a proper safe storage facility. This will protect it from fire, flood, damage, or loss. Your executors will be provided with a certificate showing them where your will is stored and how to get hold of it if you die. Whatever you do – don’t hide your will. Your will is no good to anyone if it cannot be found after your death.
If you have more tips, please add them below in Reader Comments.
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