No one likes thinking about death. Perhaps that is why 55 per cent of us don’t
make a will, according to research by AXA Sun Life. But people who die
without a will, or intestate, leave costs and complications to their loved
ones and often gift hundreds of thousands of pounds to the state in
avoidable inheritance tax.
The Law Society says that anyone with assets and family or friends should make
a will. Helen Clarke, of the society’s probate section, points out that it
is especially important if you are not married to your partner because the
law does not accord partners the same automatic rights of inheritance as
spouses. It is also vital if you have children, as you can nominate
guardians to care for them.
Miss Clarke and Paul Elmhirst, author of the Which? Essential Guide to
Wills and Probate, both advise people to use a solicitor to draw up a
will rather than use one of the cut-price will writing services advertised
online or the will packs sold by high street stationers. Miss Clarke says
that a small slip while completing online will instructions or a will pack
kit could make the will inappropriate or invalid. “Besides, filling in a
form is not the same as having a conversation with a professional. Most of
us have complicated lives and need expert help.”
To save time and money, Mr Elmhirst says that it is important to go to the
solicitor’s office prepared – with a list of assets and debts and their
approximate values. Include your property, investments, savings, insurance
policies and pension. Gillian Coverley, of Irwin Mitchell, the firm of
solicitors, says also to bring details of individual bequests. Simply
telling a relative that an item will one day be his or hers could cause
trouble later.
A straightforward will can be drafted after a one-hour session, Mr Elmhirst
says. It should be ready to check and sign within a week or so of your
visit. Solicitors’ fees range typically from £150 to £400 but can top that
in London. “Mirror wills” – two reciprocal and near-identical wills made by
a couple – cost less than two standard individual wills.
Your solicitor should offer advice on inheritance tax (IHT) planning as part
of the service. Simple measures can save the estates of most home-owners
tens of thousands of pounds in tax. Couples with assets of £600,000 or more,
for instance, can save their heirs £120,000 by providing for a discretionary
trust so that both parties use the tax-free IHT allowance of £300,000.
Legacies to charity could also be part of your tax planning. Cancer Research,
under its FreeWill programme, will pay for a solicitor to draw up or update
your will if you are aged 55 or older. There is no obligation to leave money
to the charity in return for this help.
Alternatively, solicitors participating in the WillAid scheme – a seasonal
campaign that will next run in November 2008 – ask clients to make a
donation to charities, including the British Red Cross, Christian Aid and
Help the Aged, in place of a fee. Suggested donations are £75 for a single
will or £110 for mirror wills.
A key element of making a will is the naming of executors to ensure that your
will instructions are carried out. These are often unpaid friends or family
members, typically a spouse or partner, but can be paid professionals –
solicitors or a bank or building society. Unpaid executors can choose a
solicitor to do the work and reclaim fees and expenses from your estate.
Many banks and building societies offer a will-writing service for customers
who appoint them as executors. This can take pressure off family but tends
to cost more than a solicitor. At HSBC, executorship costs a percentage of
your estate, with a minimum fee of £2,000.
Ms Coverley says that you should update your will every five years or so and
whenever your circumstances are changed by a significant life event, such as
marriage, divorce or a birth or death in the immediate family. Another
example would be after a house purchase or move.
Whoever draws up your will, make sure one copy is kept secure. Most solicitors
will store a copy without cost. Otherwise, deposit one with a probate
registry for £15. Details are available from Citizens Advice at www.adviceguide.org.uk.
CASE STUDY: New arrival prompts action
Elizabeth Aplin and her partner, William Davies, made their first wills this
year after the birth of their daughter, Elsa.
Ms Aplin says that she and Mr Davies were keen to appoint guardians for Elsa,
now six months old, and wanted to ensure that, in the event of the death of
either one of them, the surviving partner would be secure in the North
London home that they co-own. “It was the baby and the fact that we aren’t
married that prompted us to take action,” she says.
The couple used the will-writing scheme from Cooperative Legal Services to
make mirror wills at £60 each. It is a telephone service, but clients can
speak to a solicitor if they wish. “I chose it because I bank with the
Cooperative and wanted a quick and easy service,” Ms Aplin says.
Wills on the web
The internet is a good place to do some further research on wills before
making your own. The Law Society, at www.lawsociety.org.uk,
has a downloadable quick guide and contact details for solicitors across the
country.
There is more information available from the Government at www.direct.gov.uk.
The site explains the strict legal formula for how your estate will be
handled if you die intestate.
A Google search for “making a will” brings up scores of online will-writing
services that charge a fraction of a solicitor’s fee. The average cost on
these sites is about £40 for a single will. Among the big names is www.tenminutewill.co.uk,
which boasts: “Your will document will be just as legal as if it had been
written by a solicitor – in fact, effectively, it will have been.”
These sites are legal – anyone can set up shop as a will-writer – but they are
not regulated by the Law Society. The wills they create are based on
information entered into a “quick” or “simple” online form and issues that a
solicitor may take into account after discussion may be missed, leaving your
will open to challenge in court. Any mistakes you make could render the
document invalid.
Some solicitors offer online services for closer to £100 per will, but check
what telephone support is available and whether you will be able to chat
with a professional.
No will can be made entirely online. All must be correctly signed and
witnessed. Citizens Advice has details at www.adviceguide.org.uk.
