Discussing what to do with your assets after passing can be very difficult. However, making a Will isn’t just about deciding who you want your beneficiaries to be (who is entitled to benefit from your Estate); it is also about deciding who your Executors will be (who administers your Estate after you pass).
Making a Will can prevent disputes, ensure your Estate is tax-efficient, and avoid complications administering the Estate.
Making a Will: Who should your Executors be?
Many choose family members or friends when deciding who they want their Executors to be. Although to some, it may seem like an honour to show their trust that person or not offend them because they are family, choosing competent executors is essential. Dealing with an estate can be both time-consuming and difficult, and without the correct assistance, it can leave Executors liable for any loss to the Estate and scrutiny from the other beneficiaries. This can be distressing, especially if you’re processing the loss of a friend or family at the same time.
When dealing with the Estate, the following will need to be considered:
- Gathering a list of all the Estates assets and Liabilities
- Paying all outstanding Liabilities and freezing any ongoing outgoings or income (such as a pension or phone bill) to avoid overpayment and the Estate being charged later.
- Keep an accurate record of the Estate accounts during the administration and years after.
- Fill in the correct forms to HMRC to ensure the proper amount of tax is paid.
- To administer the Estate as instructed and in the Estate’s best interest, which, if it consists of various accounts and properties, can be a lengthy process.
When can a beneficiary dispute a Will?
A beneficiary can dispute a Will if they feel they have been treated unfairly or believe the Estate has not been dealt with properly. For example, the executors have taken too long to distribute the money, don’t keep the beneficiaries updated and haven’t maintained accurate estate accounts, or the Estate has suffered an unnecessary loss.
What happens if you don’t have a Will?
If you don’t create a Will, someone must apply for a Grant of Administration. This will enable them to distribute the Estate under the rules of Intestacy, which will result in your Estate being distributed in the following order:
- Your Spouse or Civil Partner will receive everything.
- Should you have Children – Your Spouse will receive the first £322,000 and one-half of the remainder of the Estate (plus interest since the date of death). The Children will receive the remainder of the Estate in equal shares.
- If you have no Spouse or Civil Partner, the Estate will be distributed equally among the children.
- Should there be no children, the Estate will be distributed equally between your parents.
- If there are no living parents, it will be distributed equally between your full siblings; should there be no full siblings, then it will be distributed equally between half-siblings.
- Should none of the above be alive, your Estate will be equally distributed amongst your Grandparents.
- Should your grandparents not be alive, your Estate shall pass to your Aunty and Uncle’s
- The Estate will pass to the crown if none of the above are alive.
What will happen to my Will if I get a divorce?
When you get a divorce, your spouse will automatically be removed from the Will to the same effect as if they were dead, and unless the Will stipulates otherwise, the share will fall under the rules of Intestacy.
Can my ex-spouse make a claim on my Estate?
After the divorce, if you were supporting your wife and paying maintenance, it is possible she could claim on your Estate. It is therefore recommended that you seek a full and final settlement, also known as a clean break order, during your divorce.
How many Executors should I have?
You can have as little as one Executor. However, this is only recommended if you stipulate in the Will replacement Executors, should you choose one/ones unable to act. This is because if something happens to that Executor or they refuse to act, an application for a Grant of Administration will be done, which can open room for both disputes or an unsuitable beneficiary or family member dealing with the Estate.
If I choose a family member or friend, can I protect them from any liability or loss of my Estate?
Dealing with an Estate can be daunting, especially if you are not on good terms with the beneficiaries or they are being unreasonable. Should you wish to, in your Will, you can release your Executor from any liability or loss and enable them to administer the Estate without informing beneficiaries of any decisions made (Though Estate accounts will need to be provided to beneficiaries).
Implementing the Society of Trust and Estate (STEP) provisions is an excellent way to do this. These include both standard and special provisions that will enable the giving or taking away of certain powers. Providing the Executor with discretion and protection from personal liability or undue pressure from beneficiaries.
How soon should I make a Will, and can I change it?
You can update your Will at any time unless you lose the capacity to do so. Therefore, it is recommended that you do your Will as soon as possible and keep it updated should any relevant changes happen in your life.
