Navigating wills and probate: Key considerations

Jan 17, 2025

Planning for the future may not be the most pleasant topic, but clearly outlining your wishes can make all the difference to your loved ones. Wills and probate are integral to financial planning, helping secure your estate and ensure it is handled according to your intentions. Below, we outline key considerations when drafting a will and managing probate.

Why creating a will is essential

A will is the cornerstone of estate planning. Without one, your assets are distributed according to intestacy laws, which may not align with your wishes. For example, if you’re unmarried without a will, your partner may not automatically inherit your estate.

A legally valid will ensures your estate is distributed as you intend, minimising potential disputes among family members. It also enables you to:

  • Appoint executors to manage your estate.
  • Provide for dependants, including guardianship arrangements for children.
  • Clarify specific bequests, such as sentimental items or charitable donations.

Statistics show that nearly 60% of UK adults don’t have a will, leaving their estate at risk of being handled against their wishes. This makes it crucial to act now and avoid unnecessary complications for your loved ones.

Key considerations when drafting your will

Drafting a will requires careful thought and planning. Here are the primary points to consider:

1. Choose executors wisely

Executors manage your estate, from paying off debts to distributing assets. They should be reliable and willing to take on the responsibility. Many people appoint close family members, but you might also consider a solicitor or financial adviser for impartiality.

2. Update your will regularly

Life events such as marriage, divorce, or the birth of children can affect the validity or relevance of your will. Regular reviews – every three to five years or following significant life changes – help keep your will up to date.

3. Inheritance Tax planning

In the UK, estates valued above the Inheritance Tax (IHT) threshold of £325,000 (or £500,000 if the residence nil-rate band applies) are taxed at 40%. Careful planning can mitigate this by using gifts, trusts, or charitable donations to reduce the taxable estate. Consulting a financial adviser is invaluable in navigating these rules.

4. Include a residuary clause

A residuary clause ensures any remaining assets not explicitly mentioned are distributed according to your wishes. Without it, these assets could be subject to intestacy rules.

Understanding probate

Probate is the legal process of administering a deceased person’s estate. If you’re appointed as an executor, obtaining a grant of probate is often the first step. This grants you the authority to manage the estate, pay debts, and distribute assets.

How to streamline probate

While probate can be complex, there are ways to simplify the process:

1. Organise financial records

Maintaining an up-to-date record of assets, liabilities, and account details can significantly reduce delays during probate. Encourage your loved ones to do the same.

2. Seek professional advice

Dealing with probate while grieving can be overwhelming. Professional advice ensures compliance with legal requirements, saving time and reducing stress.

3. Consider lifetime gifts

Gifting during your lifetime not only reduces the size of your estate but can also simplify probate. Gifts within the annual allowance of £3,000 are exempt from Inheritance Tax, and assets gifted more than seven years before death may also be tax-free.

Avoiding common pitfalls

Wills and probate can become contentious if not handled carefully. Here are a few common pitfalls to avoid:

  1. DIY wills: While DIY wills may seem cost-effective, errors or omissions can invalidate them. Using a professional ensures clarity and legality.
  2. Failing to communicate: Discussing your wishes with family members can prevent misunderstandings and disputes.
  3. Neglecting digital assets: Online accounts, cryptocurrencies, and digital files are often overlooked. Include clear instructions on how these should be handled.

Dealing with wills and probate can feel daunting, but you don’t have to do it alone. Professional financial advisers provide tailored guidance, helping you plan effectively and reduce stress for your loved ones.

At Bulley Davey, we work closely with you to ensure your estate planning is comprehensive and aligned with your long-term goals. From drafting wills to navigating probate, we provide the clarity and support you need to make informed decisions.

Contact us today to get started.

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