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 not fit for purpose. Going through the process effectively has a number of potential pitfalls.
Here are 21 tips to help you navigate the pitfalls 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 proper signing procedure. The most common reason for declaring a will invalid is an incorrect signature (certification) procedure. 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 nullified!
4. Additional at least two Executors. By all means, appoint your spouse or, indeed, anyone else, but have a second executor or backup executor in case the first option is unable or unwilling to act.
5. Choose executors wisely. The 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 issues or can’t choose the ‘right’ family member, it may be a good idea to have a professional executor. There will be a cost for this service, but it could be profitable and save family arguments.
7. Know the value of your Estate. Many people have life insurance and service death benefits that increase the value of their estate to a level where inheritance 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 the property of the new partner and will not become part of the parents’ estate for inheritance purposes. Own assets in common and leave them to the children subject to the lifetime interest of the spouse or partner.
9. Backup guardians. If you have children under the age of 18, add guardians in 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 state benefit entitlements.
11. Common law marriage is a myth. There is no such thing in English law, so if her partner dies, she will inherit nothing without such provisions in a will.
12. Marriage can invalidate your will. Unless your will is made contemplating 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 home care fees. With careful lifetime planning, ensuring joint ownership as tenants in common, and Will is confident that the asset drain 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 your reasons in a ‘Letter of Wishes’ to be kept with your will. This can be factored into any proceedings and will show that you simply have not overlooked that person.
16. Make a will in any country where you own assets. This should help speed up and simplify 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 succession under Sharia law).
17. Commercial and Agricultural Relief. Interests in a business, farm, or shares in qualified private companies (held for more than 2 years) and leased farmland held for more than 7 years qualify for 100% estate tax relief. Assets used by a qualifying company or business, 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 write your will who is trained, qualified, and has professional liability insurance, you can get 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 may 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 Executors. There are also online registration options that can be particularly helpful with large families who have moved far away.