Thinking about preparing your will can be daunting, but it doesn’t have to be. With the right advice you can ensure that your will best reflects your wishes, whilst taking full advantage of the applicable inheritance tax laws. Some of the most common questions asked by our clients, and the considerations that must be made are set out below.
Who should I appoint as my Executors and Trustees?
Many clients ask who their Executors and Trustees should be (and in most cases these will be the same person). Your Executors will need to correspond with each organisation that you hold accounts with, ensure payments of any debts from your estate, deal with any Inheritance Tax that may be due, and distribute the estate in accordance with the will. They should therefore be happy with the amount of administration that may be involved, and you should ensure that all of your Executors will be able to work well together.
Some estates can be tricky to administer if there are complicated Inheritance Tax calculations or possible legal claims by children or remoter issue. You may therefore consider appointing a professional Executor or including a clause in your will directing that your Executors may appoint a certain firm of Solicitors to assist them with the administration of the estate if they need it.
Can I appoint a guardian in my will?
You can effectively appoint your chosen guardians in your will, and such appointment will take effect on your death, provided no surviving person has parental responsibility. For example, where two married parents make an appointment of the same guardian in their will, the appointment would only take effect on the second death. Of course, it may not always be that simple and it is therefore necessary to carefully coordinate parents’ appointments.
Parents appointing guardians often ask how the guardian will cope with the financial burden of bringing up a child. Note that the guardian does not have any obligation to support the child from his own resources. Following the death of both parents, the residuary estate will be held on trust for the children until they reach an age in which they are entitled to the capital, and until that point, the guardian may apply income and capital from the estate towards the child’s maintenance and benefit.
You may also consider making a gift to the guardian, extending the Trustees’ powers to make loans to the guardian whilst the child is a minor, or writing a letter of wishes setting out how you would like your Trustees to use your residuary estate to provide financial support.
Should I include a survivorship clause?
A survivorship clause is a clause stating that you would like the beneficiary to survive a certain period of time for the gift to take effect. You may wish to include a survivorship clause to avoid assets going through probate more than once in a short period of time, or to exert some control over who the ultimate beneficiaries of your estate will be. These clauses were included as a common tax saving measure before the introduction of the transferrable nil rate band, however, since then it can lead to unfavourable results with regards to inheritance tax if the surviving spouse dies within the survivorship period, as they would not obtain the benefit of the deceased’s nil rate band. We would recommend that you obtain legal advice before deciding whether to include a survivorship clause in your will.
What about gifts to a charity?
Charitable gifts pass to your chosen beneficiaries free of inheritance tax, and there may be further inheritance tax benefits if you choose to leave more than 10% of your estate to a charity, with the added incentive that the charity of your choice is receiving a gift that could really help them to achieve a purpose. We would recommend that, if you wish to leave a legacy to a charity, you discuss with them their preferred form of wording for your will, as each charity may have different requirements. You should also consider who should inherit the legacy if that charity changes name or merges with another in the future.
To make an appointment to make or amend a Will, please contact a member of the Meaby&Co Private Client team on 0207 703 5034 or by emailing Laura Sentkovsky at email@example.com
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