A grave issue: which will is right for you?
Creating a will is one of the most important things you can do to secure your family’s financial future.
There are actually several different types of will which differ according to personal circumstances. Having the wrong type of will could have severe repercussions on what happens to your estate when you die.
For example, your estate may not be divided in the way you want, which can lead to financial and emotional complications when you die, potentially causing long-term family disputes.
Here, Emma Myers, head of wills, probate and lifetime planning for Saga Legal Solutions, a provider of legal products for the over 50s, outlines the different types available:
• Single will – Probably what most people imagine when they hear the word ‘will’, a single will is a document pertaining to an individual regardless of marital or relationship status.
• Mirror Will – A mirror will is very similar to a single will except that it’s designed for couples of who have the same, or very similar wishes. Largely identical in content, a mirror will is suitable for people who intend to leave their estate to their spouse and then to alternative beneficiaries on the surviving spouse’s death. Creating mirror wills is often cheaper than creating two single wills.
• Asset protection will (this can have many different names such as Spousal Bypass Trust, Property Trust, Property Protection Trust which in essence, do the same thing – With this kind of will, your share in the property or whole estate is put into trust to protect the value of it for your beneficiaries. This is a useful tool if you want to protect your estate from being used to pay for care home fees for your spouse after your death and is especially recommended for people with children from previous relationships.
• Discretionary Trust Will – These trusts can be the most useful type of trusts. Rather than deciding now how you would like your estate to be split, you can leave it up to the trustees to decide depending on the circumstances as they are when you die. You can use a discretionary trust will if the intended beneficiary is not mentally or physically able to manage their own finances, if they are in financial trouble or chronic debt or if they receive disability benefits in danger of being cut if they receive a windfall. A discretionary will can also give inheritance tax savings for unmarried couples.
• Living will – A living will allows you to specify your wishes with regards to medical treatment should you lose capacity, in particular with regards to refusing life prolonging treatment. This can reassure your loved ones they are acting in your best interest should the worst happen.
• Lasting Power of Attorney (LPoA) – Not a Will per se, but a legally binding document which grants another person the ability to deal with you financial matters on your behalf should you be unable to do so. This helps to avoid financial and emotional hardship in the event that you can no longer make decisions on your affairs, both in the long and the short term, due to incapacity or absence.