Drafting a will is a fundamental component of comprehensive estate planning. It serves as a pivotal document, guiding the fulfillment of your final wishes. Creating a will also serves as an act of care for loved ones.
Here are 10 essential considerations to guide you through the process of making a will:
Exclusions
If you intend to exclude someone who would typically expect to inherit, be explicit about it. This can help defend against potential legal challenges to your will. Yet, legal advice is crucial when close relatives contest exclusions under certain conditions.
Dependencies
Acknowledge any individuals financially dependent on you and outline provisions for their support. This is important for dependents not entitled to the estate, such as stepchildren. Failure to provide for dependents can lead to legal challenges against your estate.
Tax
Understand the tax implications of your bequests. In some cases, certain assets might be more tax-efficient to pass on than others.
Inheritance can have a tax of anywhere between 18-40%. An accountant can offer guidance on structuring your will to minimize the tax burden.
Unexpected Circumstances
Plan for contingencies, such as beneficiaries predeceasing you. Specify alternate beneficiaries in these cases to ensure proper distribution of assets. This foresight can prevent your estate from passing in ways you did not intend. Regularly updating your will is crucial to address such changes.
Debts
Acknowledge any outstanding debts and specify their settlement. This includes mortgages, personal loans, and credit card debts. Clarify whether people should use specific assets to settle these debts. Proper planning ensures that your beneficiaries are not unduly burdened by these obligations.
Digital Assets and Online Presence
Managing your digital legacy is an emerging concern in estate planning. From social media accounts to digital wallets and online businesses, clear instructions for these can prevent legal complications. Regularly updating access information and directives is crucial as well.
Storage of Will
Store your will in a secure, accessible place and inform your executor of its location. Consider using a solicitor’s office, a bank safe deposit box, or a will storage facility. Avoid locations prone to hazards like fire or flooding. Make sure the executor knows where your will is to avoid any complications later.
Regular Updates
Life changes such as marriage or asset gains necessitate updating your will. Regular reviews ensure your will remains relevant and reflects your current wishes. An outdated will can lead to unintended consequences and disputes among your heirs.
Legal and Financial Advice
Securing expert advice is essential in crafting a legally binding will. Professionals can provide insights into complex situations and offer strategies for estate planning.
This guidance is especially crucial for high-value or complicated estates. Ongoing relationships with these advisors can facilitate timely updates to your will.
Personal Sentiments and Final Messages
Beyond the distribution of assets, a will can convey final messages to loved ones. Including personal letters adds a personal touch to your estate planning.
These messages can provide comfort and closure to family and friends. It’s a thoughtful way to express love and gratitude while expressing your wishes.
