Do It Yourself Wills are cheap and readily available in high street stores, Post Offices or over the Internet. They allow ordinary people who are reluctant to use a solicitor to draw up a formal Will.
So they appear to be good value and they no doubt are if it is done correctly. Unless you get it absolutely right, a DIY Will might create serious problems for those left behind.
DIY Wills cost as little as £10, which considerably less than the average of between £250 and £400 it can cost to have a solicitor draw up a mirror Wills. So whilst the cost is important it is really important to remember that a Will is a legal document that determines how your estate is to be divided up in the event of your death. Get it wrong and your loved ones could face lengthy and costly legal battles to try and unravel the situation. So if you have decided to draw up a DIY Will, what should you remember and what are the most common mistakes?
Over a certain threshold, your estate may be subject to Inheritance tax. There are ways that you can make gifts to family members in your lifetime that are exempt from any Inheritance tax calculations, but unless you speak to a solicitor, you and your family may be missing out financially. If there are children from a previous marriage to consider, it may be wiser to draw up a Trust fund alongside your Will to make sure that they are not excluded from any inheritance you may wish to pass onto them.
A couple usually own property as either joint tenants or as ‘tenants-in-common’. If both partners are named on the deeds of the property as joint tenants, it will automatically revert to the surviving partner on the death of the other partner, but will not be regarded as an inheritance. If you have written a DIY Will that leaves half of the value of the property to another person such as a child from a previous marriage, they cannot inherit unless you have changed the ownership of the property to tenants-in-common. This is something that a solicitor can advise you on in more detail.
Leaving money to charity
Many people like to remember charities in their Wills. But unless a specific charity is mentioned by name, leaving a legacy to ‘cancer relief’ for example, could cause problems unless you have specified exactly which cancer charity you want to benefit from your Will. In a worst case scenario, it could mean that more money from your estate is used up in legal battles than actually goes to the charity. Be specific if you wish to leave a donation to a charity in your Will.
Who writes the Will?
The Will should not be written by one of the main beneficiaries, as those sowritten meone who stands to benefit most are open to legal challenge. If you are unable to write it yourself, make sure that the person drafting it for you is independent of any beneficiaries that are named in the Will.
Don’t just Google it for a few tips
Putting in excess ‘legal stuff’ just to make a Will look right can actually create problems. If a phrase is put in but in the wrong context, it can alter the meanings.. Keep the wording simple and clear if you aim to avoid unnecessary disputes between your beneficiaries.
Don’t give it too early
It maybe an obvious thing to leave your estate to a child or whoever without much more thought than that. And while this may also seem like the right thing to do, it could also lead to problems if the estate is left to a young person or someone who cannot manage their affairs themself. An alternative is to draw up a Discretionary Trust that is managed by a trustee. That way, they can ensure that the estate is managed properly and the beneficiary can really benefit for their lifetime.
The Nil-Rate Band for Inheritance tax
Estates valued at over a certain amount (currently £325,000 2010/2011) are liable for 40% tax on the balance over the ‘nil-rate band’ tax allowance. Any assets passed between spouses or civil partners are exempt from this. Couples whose estates are worth more than the nil-rate band should also consider setting up a Discretionary Trust to ensure that their children do not have to pay high levels of Inheritance tax. A solicitor will be able to advise you on this and help you avoid wasting what is known as ‘spousal exemption’.
Updating your Will
You may have made a DIY Will as a spur of the moment decision. What happens after that? If you forget to review your Will you may miss the need for it to be updated after changes in your circumstances. Then if that DIY Will is found after your death, it will be used as your last wishes. If your wishes have changed, they will not be considered as part of the last Will and Testament. If you have remarried, for example, the Will is invalidated (except in Scotland). You need to make sure the Will you leave behind is the one you want to do what you want at the right time.
DIY Wills are still legally binding documents, so it is prudent that you get it right. If you have any doubts about your DIY Will, talk to a solicitor who will be able to help you make sure that your Will is suitable for your circumstances and legally valid. This is particualrly important in relation to the attestation and validity requirements which really should be checked.