Preparing and Structuring Your Wills

Home visits are made where appropriate.

Do not worry if you don't have full answers to all the points in this note – if your affairs confuse even you, FitzPatricks can help. As we charge an hourly rate for wills, the more preparation you can do, the less time you will spend with us and the more favourable will be the bill.

"Better still, where their wills are mirrors of one another, spouses get two wills for the price of one."

• Full names and addresses of will-makers are essential. If any property or assets are in a name that is different from that in everyday use, details will be needed. Full names and addresses will also be needed for executors and guardians and, if possible, beneficiaries.
• If there are children, perhaps from a previous marriage, where support is still being provided, or if a will maker is paying maintenance to a former spouse, these are matters which will require careful attention. It will be advisable to bring the relevant divorce, other family court, or Child Support Agency papers.
• It will also be wise to provide information concerning any beneficiary with special needs or other circumstances, which must be considered. Under this head, you may be considering proposals for the care of a child after the deaths of the parents. You will also have in mind any possible beneficiary with financial difficulties, or whose marriage is unstable. In the first case, you may not wish your estate to go to creditors – in the other, you will not wish it to go in the share-out that follows the divorce.
• A question frequently asked is whether an executor can also be a beneficiary. The answer is yes, provided the will contains the appropriate wording. But beneficiaries, or the spouses of beneficiaries, should not witness wills as gifts to witnesses or their spouses will not be allowed to stand, unless all residuary beneficiaries are of full age, sound mind, and agree.
• Marriages revoke wills, save where the will is expressed to be in contemplation of a particular forthcoming marriage. Anyone whose last will was made before his or her present marriage is intestate and needs to make another will at once.
• Divorces change but do not revoke wills. They exclude the former spouse and the results of this can be unexpected, especially if the former spouse was an executor. Divorce is always an occasion for making a new will.

2.    Inheritance Tax ( IHT ) information

• For the year 2007/2008 assets under £300,000 are free of Inheritance Tax (IHT).  Subject to the exceptions mentioned below, assets in excess of £300,000 are taxed @ 40%.  FitzPatricks will be pleased to advise on IHT planning.
• Small estates below the figure of £300,000: it is unlikely that there will be a need for a detailed consideration of the values of assets, unless there are to be numerous beneficiaries dividing the estate into very small sums. Even in small estates, consideration should be given to the need for an Enduring Power of Attorney.
• IHT exemptions and reliefs: These include gifts between spouses(but not unmarried partners), charities, certain heirlooms and political parties. There are also 'Reliefs' for certain business and agricultural assets and complex arrangements for double-taxation relief with regard to assets in certain foreign countries.
• IHT planning (1): Because gifts between spouses are free of IHT, which makes it easier for each spouse to leave everything to the other, there is the possibility of a higher liability to IHT on the death of the surviving spouse. This can be reduced by giving away assets on the death of the first spouse. But consider the needs of the surviving spouse to ensure his/her financial independence. Gifts on the death of the first spouse clearly reduce the amount left to secure the independence of the survivor. Because of salaries and pensions, there is likely to be a difference between the needs of a surviving husband and a surviving wife. FitzPatricks will advise on these matters, except where they involve detailed consideration of the Laws of other countries, where they will try to find the appropriate adviser, should this be needed.
• IHT planning (2): If you have made gifts within the last seven years, these may be liable to IHT.  If this happens, it could lift your estate above the £300,000 threshold.  You should tell your Solicitor about any such gifts.

3.    Details of Assets

• If there is any foreign property, details should be provided.
• Particulars of business interests will be needed.  In certain circumstances these can reduce the IHT bill.
• Wills are made with the information available at the date of the will.  Save for exceptional cases, it is not wise to second-guess the future in terms of assets. The Law Society advises solicitors to tell clients that they should review (which does not necessarily mean change) their wills every five years (some will wish to do so more frequently) and more often if there is a change in family or financial circumstances. The future may well be worth considering in terms of family accidents, a matter addressed below. For a short list of assets to help with the preparation, not inclusive of all possibilities, click List of Assets at the foot of the page.
• Occupational pensions are not matters which need normally be included when making wills. They are dealt with by the completion of a nomination form addressed to the pension trustees setting out the wishes of the pension- holder in the event of his/her death. However, they are an essential part both of IHT and cash flow planning and it is helpful to the solicitor to know about occupational pensions.
• It is also wise to consider life assurance cover. Like Occupational Pensions, policies are not part of the estate if they are held on trust. This makes them important in the context of IHT and cash flow planning. Sometimes, will-makers consider policies as part of the funds available for distribution under the will, but they may not be available if they are held in trust.  Professional advice will be needed
• Gifts:  The Solicitor needs to know about lifetime gifts over £3,000 in any of the last seven years.  Some gifts may be subject to IHT on your death and, if they are, this will affect the amount of money you are able to leave to your family, friends and charities.

Go to main assets

• Although not essential, it may be helpful for wills to give the wishes of the will-makers in the matter of funeral or cremation. It will save one decision later on by the family, who will have quite enough to think about when the time comes.
• Unless there are IHT planning considerations, it is frequently the case that each spouse (maybe partners as well) will leave the whole estate to the other. The other may also be appointed sole executor. This is the first stage of the will. Some will makers stop here.  While gifts between spouses enjoy exemption from IHT, gifts between partners do not.
• Other will-makers, who are spouses or partners, will consider looking beyond the first stage to the position after the death of the survivor. This is the second stage. Apart from this being sensible for IHT planning, the two spouses (partners) may be involved in a fatal accident. It is sensible in any event to look beyond the death of the survivor and make arrangements for leaving funds to any children there may be. Will-makers should then consider when the children will be old enough to use their inheritance sensibly and make sure they do not get it all until then, although some will-makers are happy for children to get a certain amount at an earlier age. FitzPatricks will be pleased to advise on matters mentioned in this paragraph.
• Alternative executors and trustees will be needed to look after funds held in trust for children until the date specified in the will when they are to receive their inheritance. It is expected the trustees will need various powers in relation to these funds, including power to advance money for maintenance or education of a beneficiary and power to invest. FitzPatricks provide executor and trustee services if desired.
• If the children are still young, guardians should also be appointed. If this presents serious difficulties, the appointment of guardians should not hold up the will but can be dealt with later. Children from the age of about twelve will frequently make up their own minds who they wish to live with in the absence of parents.
• When the children are young and travel with their parents, it may be wise, as the third stage, to consider what should happen to the estate, including the pension funds and insurances, if there were to be a fatal accident – sadly, this unlikely event can happen – involving the whole family. Understandably, some people cannot face this eventuality but, if they do not do so, the Law provides a scheme of distribution as if there were no wills. There will then be the equivalent of an intestacy, which may not be what is needed, particularly where the will-makers are partners rather than spouses.
• If there are no children, or if the will-makers are considering the possibility of a fatal accident, the third stage may involve considering other relations, on one or both of the husband's and the wife's sides (likewise partners); also friends, or charities. It is important that spouses agree about what is to happen at this stage. If they don't, it becomes a lottery as to who will get what. This will depend on which spouse survives. FitzPatricks are aware that this paragraph does sometimes present difficulties and will be pleased to advise where advice is needed.
• When the will-maker is unmarried, not co-habiting and has no children, the situation described in the last paragraph will be much easier.  Specific and Pecuniary legacies (next paragraph) may be more important.
• Wills may - there is absolutely no pressure to do this - also give consideration to gifts of particular assets (we call these 'Chattels' and gifts of chattels are called 'Specific Legacies') and also gifts of money ('Pecuniary Legacies') which might go to particular beneficiaries. It is sometimes thoughtful to leave something to the lay executors and guardians, for example, in return for the burdens they are prepared to take on. There may also be parents, grandchildren, godchildren, people who have been very helpful and deserve something and, finally, charities. On the other hand, the needs of immediate family may not allow for such generosity. FitzPatricks will be pleased to advise.
• So often a will, which otherwise would be beautiful, achieves unexpected results because the right calculations have not been made. In an estate where there will be a liability for IHT, it is important for the solicitor to calculate this liability to ensure the gifts can all be met from the funds available after IHT has been paid. This is because some gifts will be made free of IHT, while others will not and there may also be lifetime gifts to be considered.   Legacies are usually expressed to be free of IHT, while the payment of IHT tends to come from residue. This may not be the right way of handling the matter where there is a legacy of property, or where charitable and non-charitable gifts are to be mingled in the residue, or if the result of the calculation is simply an incorrect balance between the legatees and the residuary beneficiaries. This makes it important that the intentions of the will-maker are correctly interpreted and the liabilities to IHT are correctly positioned among the various gifts. Advice will be needed and FitzPatricks will be pleased to help.

• Mirror or mutual wills:- Spouses and partners alike, who have made virtually identical wills, will need to know the difference between mirror and mutual wills. A mutual will is one where they have agreed that after the death of the first to die, the survivor's will is to remain unchanged. There is no such agreement with a mirror will. If they cannot make up their minds, there will be no agreement. If the wills are mutual wills, they will be enforceable after the death of the survivor, by the beneficiaries named in them, to the exclusion of any later will the survivor may make.  Advice will be needed.
• Where there is a trust, and a trustee dies, the power of appointing a new trustee will either be with the remaining trustee or with the beneficiaries, depending on what the will says.  Advice will be needed.
• The Law now requires will-makers to consider whether the executors/trustees must consult with the beneficiaries in the administration of the estate. This can create great difficulties where a beneficiary is under age and may also be difficult for executors/trustees who might be confronted with a requirement to do something they consider unwise in the context of the administration.

These are all matters needing some thought and FitzPatricks will be pleased to assist.

• It is vitally important for the solicitor to meet the will-making client. This is to discuss the instructions and even, sometimes, to improve them by taking into account matters which the will-maker – who, unlike the solicitor, seldom makes a will – may have overlooked. Having given every care to these instructions, and given the benefits of computers, wills should not take long to prepare. Better still, where their wills are mirrors of one another, spouses get two wills for the price of one.

7.    Changing Addresses

• It is not essential for a Will to be changed every time the Will-maker moves house, though a Will should always be reviewed at that time.  If a beneficiary changes address, it is necessary only to make a note of the change of address and keep this with your copy Will at home.
• When you do move house, please remember to notify banks, building societies, life insurance companies, pension trustees and any other investment holders.  If you forgot to do this when you moved, your Will is a good time to ask if you have lost touch with old pensions and policies.

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