Get a free will this October
Free Wills Month is a campaign which runs in October and March each year offering people aged 55 and over a simple solicitor-drafted will without any cost.
For couples making ‘mirror’ wills, one partner only needs to be aged 55+.
Solicitor firms all over England, Northern Ireland and Wales take part in the campaign – see the Free Wills Month website to see what’s available in your area.
Appointments are limited and are on a first come, first served basis. Once they’ve all been booked up, the campaign will close which could be before the end of the month if there’s high demand.
While solicitors will waive their usual fee – a simple will usually costs around £150 – you’re encouraged to make a donation to one of the Free Wills Month charities which depend on legacies for up to half their income.
However, you’re under no obligation to do so, though it states: “we earnestly hope that many will see this as a chance to help their favourite cause”.
Five tips to help you write a will
While many people feel uncomfortable about writing a will and thinking of the worst-case scenario, it takes the guess work out of where you want your money, assets and possessions to go after you die.
Emma Watson, head of financial planning at Rathbone Investment Management, said: “Writing a will, though it may seem uncomfortable to do so, is one of the most important things you can do for yourself and your family. Not only does it mean keeping your financial affairs in order and having some sort of control over your finances, but it can also legally protect and support loved ones.”
Watson added: “It’s also important to review your will regularly to make sure it matches your current wishes, particularly after life events like marriage, divorce, and births of children and grandchildren. When looking to financially gift to loved ones, thinking ahead can help you and your family save money by reducing their inheritance tax (IHT) bill.”
Below, Watson shares five tips on what to consider when it comes to sorting your financial affairs and writing a will:
1) Think of your dependents
If you have children or step-children, writing a will is one of the most important things you can do to protect them financially and potentially help them navigate economic hurdles down the line. It’s important not only to consider how your estate is divided up, but also who you would entrust to care for your children (under the age of 18) if you and your partner were to pass away suddenly.
It’s a huge decision to make, so make sure you speak to those who you’d want to appoint as guardians first. By not creating clear instructions this decision could be left to the authorities on your death and their decision may not reflect your wishes.
2) Protect your partner
Fewer people are getting married, with the number of co-habiting couple families increasing at a much faster rate, according to ONS research. Sadly, the law hasn’t caught up, meaning unmarried couples are largely unprotected if one should die.
Unlike for married couples or those in a civil partnership, there is no legal right to property not jointly owned. If you have children together then this could mean that your partner risks not being able to stay in the family home or have enough money to bring up your children. To make sure they are protected, it’s crucial that you have a will in place expressing your wishes regarding children and assets.
3) Put assets in a trust
There are many different types of trusts, and where available, putting some of your assets into a trust can mean they’re no longer part of your estate for inheritance tax purposes. However, the rules around trusts are complicated and have changed over the years; for example, you could be taxed as you gift money in or take money out, so make sure to seek advice if you’re considering this option.
4) Gift to charity
Anything left to charity is free of inheritance tax, so it can be a worthwhile planning tool to reduce your bill, while also benefiting a good cause. Additionally, if 10% of your net estate is left to charity the rate of inheritance tax applicable on your estate on death is reduced to 36% from 40%, reducing your Inheritance Tax liability.
5) Keep below the Inheritance Tax threshold
On death, you can usually pass on assets up to the value of your nil rate band (NRB) without having to pay any IHT. Each individual has their own NRB which is currently £325,000. The residence nil rate band (RNRB) is a further allowance of £175,000 and is available to anyone who passes the family home to direct descendants. This RNRB will reduce for estates over £2m. Any part of the estate above your available tax-free thresholds is usually chargeable to IHT on death at 40%.
IHT isn’t normally payable if you leave everything to your spouse, civil partner, or a charity. In addition, any of the NRB and RNRB not used on first death can be transferred to the survivor, meaning the total allowance for couples could amount to £1m. Establishing your IHT position can be complicated therefore it may be worthwhile seeking advice to help you understand your position.