Many reasons you should not put off writing a will

Q A

I’VE been putting off writing a will for a few years. Why do I need one?

HAVING a valid will is one of the fundamental issues that any individual concerned with financial matters must address.

Apart from the fact that having one means that you decide who benefits from your estate on death, the inclusion of appropriate provisions in a will can provide the opportunity to save substantial amounts of inheritance tax.

Wills can also be used to create trusts on death to cater for different needs of beneficiaries especially minor children and vulnerable individuals unable to look after their own affairs.

Where an individual dies without a will, the law dictates who inherits the deceased’s property. The legal term for this is intestacy.

REASONS FOR MAKING A WILL

■ Ability to choose beneficiaries and executors.

■ Make specific arrangements for minors, including guardians.

■ To exercise control over the ultimate destination of property. Will trusts can be useful where it is desired to create successive interests in property. An example might be where the deceased, who has children from a previous marriage, would like to provide financial security for a new partner if they survive the deceased but would ultimately like the capital to be preserved for the deceased’s own children.

■ To secure inheritance tax savings.

Where there is an intention to benefit minor children, it will often be a good idea to make the gift subject to trust so that controls and conditions can be imposed.

This is particularly relevant where significant sums are involved.

Outright gifts to charity are exempt from inheritance tax whether made on death or during lifetime.

However, where someone leaves at least 10% of their net estate to charity, the rate of inheritance tax on the rest of the estate can be reduced from 40% to 36%.