Making a will - step by step what is involved

Before you can give instructions to a solicitor to draft your will, in simple terms, you need to decide who gets what.

You should set down the basics of your plan for your money and possessions – your estate – early on, before you visit a solicitor or discuss your will with your family.

Don’t worry, it’s easier than it sounds – just follow this step-by-step process.

1. Make a list of who you want to benefit from your estate

It’ll probably take you just a few minutes to tick off this step – you can even do it right now.

You might include:-

Your partner and children/grandchildren;
friends
charity

These people (or charities) are called your beneficiaries.

2. Write down your assets and their approximate market value

Start with assets that are easiest to value:

savings
valuable objects, like jewellery or heirlooms

Then move on to the things that change in value. These will be harder to estimate exactly.

They include:

your pension
your business, if you own or part-own one
stock market investments - shares, bonds & funds
property – your house, plus any investment properties, land, or even a parking space that you own. Remember to factor in the value of any debts secured against your property.

Lastly, think about any sentimental items that you want particular people to have.

Whether you can include your pension will depend on the rules of your pension itself and you’ll need to check.

If you can include your pension, estimating its value might take some thought.

The value will depend on your scheme and when you die. Your first stop should be to read the death benefits advice.

3. Think about how you want to split your money and property when making your will

There are broadly five types of legacy you can leave.

“I leave £2,000 to my son” – this is called a ‘pecuniary bequest’. It means you leave a fixed sum of money.

“I leave my jewellery to my daughter” – this is called a ‘specific bequest’. It means you leave a specific item which you own. The way to identify it will be to see what meets that description at the date of death. If there is no jewellery at that time, then the gift will fail.

“I leave half my estate to my brother” – this is a ‘residuary bequest’. It means you leave a percentage of whatever your estate is worth after any debts, costs, liabilities, legacies and tax have been paid.

“I leave my share of my house to my wife if she survives me, but if she does not survive me then it will pass to my daughter” – this is a ‘reversionary bequest’ for your daughter. You can specify what happens if the person you leave it to dies.

“I leave my share of my house to my wife for the rest of her life, and then it will pass to my daughter” – this creates a ‘trust’ over your share of the house. A trust allows you to say who you would like to benefit from your property immediately after your death (e.g. your wife), and then who you would like to benefit from your property (e.g. your daughter) once the first person you have chosen to benefit immediately after your death has died. This type of gift can easily go wrong so it is most important that you consult a solicitor when drafting a will to include a ‘trust’ in your will.

4. Check if you’ll have to pay Inheritance Tax

The Inheritance Tax threshold depends entirely on the beneficiary's relationship with the Deceased and are liable to change after each Budget. 

If your value of the individual inheritance is worth more than the class threshold or the beneficiary doesn’t qualify for relief as an agricultural, favour nephew/niece or business relief, then Inheritance Tax (currently 33%), will have to be paid on the excess.

We woudl always recommend that in circumstances where it is likely that the beneficiary will be liable to pay significant capital acquisitons tax, that a solicitor and financial advisor should be consulted to avail of appropriate tax and estate planning advice.

5. Think about protecting your beneficiaries

Sometimes you might want to set some safeguards on your bequest – for example, if you’re leaving something to a child or someone with disabilities or mental health issues.

Many people handle these issues by setting up trusts: this means that what you leave can be managed by people you trust to act in the best interests of your beneficiary, either permanently or until a time when they can look after themselves.

What to do once you’ve made your will

Once you’ve worked through the steps, you’ll have a reasonably clear idea about what you want to leave in your will and to whom.

We recommend you always consult with a solicitor before making a will.

Feel free to contact Loraine N. Hanratty of these offices to arrange a consultation.