One of the best things about making a Will is the relief that comes from knowing it is done. Having taken the time to contemplate death, and to document what we want to happen if we die, we move quickly on with our lives safe in the knowledge that an important ‘to-do’ is ticked off our list.
The thought of revisiting our Will to check it still meets our needs is not a pleasant one. Yet assuming your Will does (or doesn’t) do something it should is often as bad as not having a Will at all.
Here are three mistakes your Will could include that you may wish to change:
How much is that professional executor going to cost your family?
According to the Office of Fair Trading, consumers are spending more than they need to because they are tied in to professional executors and don’t realise they have other options or are not aware of the costs. The Office of Fair Trading found that consumers paid between £3000 and £9000 on average for a professional to act as executor. This shows that the biggest expense isn’t the cost to write your Will, but when your financial affairs are sorted out after your death.
If you appoint a professional executor in your Will, they will often require a payment to step aside if your other executors no longer wish to use them (maybe because their fee is too high or the service is not good enough).
The law doesn’t require you to have a professional executor. You are free to ask whoever you like. A cost effective starting point is to choose suitable friends or family to act as your executors. They can bring in professionals if they feel it is necessary and negotiate the best price at that time. This is more flexible than being tied to one firm and their fees. The consumer magazine Which? recently found that banks charged on average £10,800 to act as professional executors, solicitors £5,200 and will writers £4,800. According to Which? banks charges can be as much as 4.5% of the value of the estate, plus VAT.
If you have a professional executor in your Will, find out on what basis executor fees would be charged and what happens if your other executors do not wish to work with them.
Alternatively, replace them with friends or family, who can then choose to instruct a professional to advise them or act for them when the time comes. Of course, if your estate is complicated, it is very important for your executors to obtain professional advice.
Does your Will provide any protection to your beneficiaries?
Whilst it is typical to want to leave your estate directly to your spouse and children, you may not be aware of the risks of leaving wealth outright?
Give some thought to the following questions
- If your spouse remarries
Marriage invalidates any existing Will and your children could be unintentionally disinherited in favour of the new spouse and their family.
- If the survivor of you, or one of your children, requires means tested benefits or services
Assets left directly to a beneficiary will be fully assessable for any means tested benefits or services. This could result in them missing out on valuable resources.
- If a child gets divorced or becomes subject to creditor or other legal claims
Assets left directly to a beneficiary will be part of their estate for the purposes of legal proceedings. A large proportion of their inheritance could be unintentionally lost if such proceedings are not finalised before your death, or occur any time after.
- Inheritance tax paid repeatedly on the same family assets
Any inheritance you leave directly to your beneficiaries will add onto their estates and may be subject to inheritance tax on their deaths. This can often mean that tax is paid repeatedly on the same assets as they pass from one generation to the next.
If your Will leaves your estate directly and you are concerned about some of these scenarios, you can incorporate a flexible trust in your Will to provide better protection to the wealth you leave your surviving spouse, children and grandchildren.
Does a Lasting Power of Attorney accompany your Will?
A will enables your affairs to be managed after your death. A Lasting Power of Attorney enables your affairs to be managed whilst you are alive and have lost capacity. Together, both documents ensure that your affairs can be dealt with, on your behalf, no matter what life throws at you.
A Lasting Power of Attorney may not have been discussed with you at the time you made your Will. In living longer, and with the chances of suffering ill health increasing as we age, this document is as important as your Will in giving you the final say as to who makes decisions for you. There are two types; one for financial decisions, and one for welfare decisions. Don’t think you have everything in place for your family if you do not have these documents.
Nicola Sunderland TEP makes writing your Will and Lasting Powers of Attorney easy. We offer a fixed price that includes a free initial consultation at your home.