21 Probate Tips to Improve Your Estate Planning
Most adults believe that making a will is a good idea and something they should do. For a variety of reasons, more than 50% of UK adults never make a will. Of those who make wills, up to 50% are invalid or fit for purpose. Going through the process effectively has a number of potential pitfalls.
Here are 21 tips to help you navigate the issues and pitfalls:
1. Make a will. Without one you will die intestate and the Law decides who gets your assets and in what proportions.
2. Observe the proper signing procedure. The most common reason for declaring a will invalid is an incorrect signing procedure (certification). Two witnesses must see the testator sign the will and sign a statement stating exactly that.
3. Witnesses must not be beneficiaries in the will. If they are, the will is still valid, but any inheritance in the will is void!
4. Additional at least two Executors. By all means, designate your spouse or indeed anyone else, but have a second executor or standby executor in case the first option is unable or unwilling to act.
5. Choose executors wisely. Executors will be responsible for managing your estate. They need to be trustworthy, willing and able.
6. Consider appointing a professional executor. If you have complex matters or cannot choose the ‘right’ member of your family, it may be a good idea to have a professional executor. there will be a cost for this service, but it could be cost effective and save family arguments.
7. Know the value of your Heritage. Many people have life insurance and service death benefits that increase the value of their estate to a level where estate tax issues need to be addressed.
8. Make sure your children inherit. If a parent remarries or purchases property jointly with a new spouse or partner, that property is owned by the new partner and will not become part of the parents’ estate for inheritance purposes. Possess property in common and leave it to the children subject to the lifetime interest of the spouse or partner.
9. Backup tutors. If you have children under the age of 18, add guardians to your will. If you don’t and the worst happens, your minor children will be placed in the care of Social Services until a court decides who gets custody.
10. Use special discretionary trusts for disabled children. The right type of discretionary trust will provide the optimal support for your disabled child without reducing entitlements to state benefits.
11. Common law marriage is a myth. There is no such thing in English law, so if your partner dies, she will inherit nothing without such provisions in a will.
12. Marriage can invalidate your will. Unless your will is made contemplating the marriage, your will will be invalidated by the marriage. You will need a new will!
13. Divorce does not invalidate your will. However, his ex-spouse is treated as if he had died. The effect may be that you would be intestate or partially intestate. You should get a new will.
14. Plan to avoid nursing home fees. With careful lifetime planning, ensuring joint ownership is as tenants in common and Will is confident that the asset-draining costs of care home fees can be avoided or mitigated.
15. Be careful if you are leaving someone out of your will. Your wishes may be subject to challenge in court. If you do not want a child or other dependent to inherit, please provide the reasons in a ‘Letter of Wishes’ to be kept with your will. This can be taken into account in any proceeding and will show that you simply have not overlooked that person.
16. Make a will in any country where you own property. This should help speed up and simplify the succession in that country. NB, there are exceptions where making a local will would be disadvantageous or worse (for example, the United Arab Emirates, which could invoke probate under Sharia law).
17. Commercial and Agricultural Relief. Interests in a business, farm, or shares in qualified unlisted companies (held for more than 2 years) and leasehold farmland held for more than 7 years qualify for 100% inheritance tax relief. Assets used by a qualifying company or company, or a controlling interest in a publicly traded company, will qualify for 50% relief.
18. Never alter or tamper with your will. Any damage or alteration may invalidate your Will.
19. Do not bet on a will made by yourself. By using a professional to draft your will who is trained, qualified, and has professional liability insurance, you can achieve the peace of mind you want and need. If you go the DIY route and then make a mistake, you will have saved some money, but to what end? There is no going back and your surviving loved ones will not think about the few pounds you saved.
20. Keep your will safe. If you die in a fire, your will can also burn. Making a will is the first stage: it must be available when needed. Consider taking advantage of secure storage options to ensure it doesn’t get damaged or destroyed.
21. Tell your executors and beneficiaries where to find the will. This can be achieved through secure storage with storage certificates provided to Runners. There are also online registration options that can be particularly helpful with large families that have moved to faraway places.
