This is a question that is frequently asked. What exactly is the objective of making a will? What motivates us to do this?
Making a will is a very personal decision to make. It is not my responsibility to persuade someone that they should prepare a will. To be honest, I created a will because I believe it is a gesture of concern and affection for the individuals who would be left behind after I pass away. Other folks are motivated by different factors. Some of these reasons for making a will have already been discussed elsewhere on this site.
Rather of obsessing on my own opinions, I decided to check into what the experts had to say about the matter. It has been published by the Society of Trust and Estate Practitioners (STEP) what they consider to be the most important reasons to prepare a will.
Here are the details: https://wills4less.co.uk/
Avoid the distribution of an intestate estate that is mandated by law.
If you don’t make a will, the rules of intestacy will apply to your estate. It’s possible that this isn’t something you desire to happen. In the event that there are no other near relatives, you may not want Long Lost Cousin Bertie to receive your estate. If no relatives can be discovered to inherit your inheritance, the Crown will take over. Making a will allows you to choose who will inherit your property. You can also include a “wipeout” provision in your will in the event that everyone you wish to remember passes away before you. People frequently recall a charitable organisation in this area.
Your will can help to guarantee that your estate is distributed in an equitable manner. If you have given disproportionately large gifts to one child or relative over another throughout your lifetime, you can use your will to make up for the difference.
Finallt, if you are part of an unmarried partnership, your spouse will not be entitled to anything upon your passing. In 2019, there were 3.5 million unmarried couples. That equates to more than ten percent of the population of the United Kingdom.
Rob Long’s photograph of an aged hand grasping a youthful hand Your fortune can be passed down across generations if you use a will. More thorough provisions should be made for people who have special requirements.
It is possible that one of your beneficiaries will require more financial support than the rest. This might be due to the earning capabilities of your beneficiaries or their family circumstances. It might also be owing to the fact that a particular beneficiary need greater assistance.
If one of your beneficiaries is handicapped or has special educational requirements, you can include a provision in your will for the establishment of a Disabled Person’s Trust. There are a variety of advantages available to the recipient. The primary advantage of establishing a properly structured trust rather than making an outright gift is that you may avoid having a negative impact on the beneficiary’s benefit payments. If it becomes essential, the trustees can have additional control over how the beneficiary’s money is used.
In the event that you wish to establish a trust for one of your beneficiaries, you should seek the advice of a typical solicitor.
Preventive actions should be taken to safeguard family businesses.
In intergenerational enterprises, wills are an important aspect of succession planning. A will can be used to transfer ownership of company assets, stock, and other property to chosen recipients. Check to see that the will you create is consistent with other business papers before signing it. For example, if your will does not reflect the same intentions as your Shareholder Agreement or Partnership Agreement, there might be confusion or a conflict.
If you own a company, commercial property, or agricultural property, and your estate is likely to be worth more than the inheritance tax exemption amount, you should get tax planning guidance immediately.
Make a plan for the orderly transfer of wealth across the generations in a family.
An analogy might be made with the handover of your family company. When a family is fortunate (or at the very least – affluent), their money might become their business. A will can specify the procedures for preserving that riches for future generations by designating who will be in charge of it. More complicated wills include procedures to guarantee that money is distributed in the manner in which you choose. You have the ability to establish standards for trustees to follow. These can give preference to those who are most in need or use other factors to make decisions.
If you are considering a sophisticated trust structure such as this, you should consult with a conventional solicitor and obtain complete tax advice before proceeding.
Another ambition you may have is to transfer your inheritance down two generations to your descendants. The ability to skip a generation exists if you have adult grandkids (and even great grandchildren). There may be further tax planning advantages to doing so as well.
The use of discretionary trusts to provide future dividends with greater flexibility
As previously discussed, a will can specify how money should be dispersed. You may also take care of future generations who have not yet been born by donating money. Discretionary trusts are a form of trust arrangement that can be established. Discretionary trusts can benefit any class of beneficiaries (for example, children or grandchildren) in a way that the executors see appropriate. Alternatively, you might specify how you would like the trustees to exercise their discretion by establishing regulations.
Additionally, unmarried couples frequently utilise discretionary trusts to avoid paying needless taxes (see below).
For those who wish to set up a discretionary trust, they should consult with a conventional solicitor to verify that their requirements are satisfied. A discretionary trust that is poorly or incorrectly established can result in a slew of complications, upheaval, and financial outlay. Reduce the amount of taxes that is unnecessary.
Once again, this is a tax-planning consideration. A will provides you with the opportunity to express your preferences. Unless your estate is subject to inheritance tax, you can accomplish this in the most tax-efficient manner possible.
Any tax planning considerations should be discussed with an experienced solicitor, who should then prepare an individual will for you.