Many people solely focus on their money and assets when laying out details for their estate in their will.
This is somewhat understandable: your will is a great vehicle for securing your wealth for the next generation of your family. But as a result, other elements that aren’t directly related to your money can be overlooked in your estate plan.
So, here are five simple but potentially important things that you may want to include in your will.
1. Naming who you’d like to receive sentimental items
Despite often having even more meaning than money and assets, sentimental items can go by the wayside when making decisions on the future of your estate.
The term “sentimental item” is quite broad, but could include:
- Family jewellery or other heirlooms
- Furniture
- Artworks, including books and paintings.
It can be particularly useful to do this to avoid disputes between family members over certain items.
For example, you might have informally promised to give a precious heirloom to one of your children, perhaps a pair of earrings or something larger like a vintage grandfather clock.
However, without anything in writing to say that your child is entitled to the item, other family members may feel that they have a right to it, especially if it is particularly valuable.
You can help eliminate the possibility of such disputes by outlining specifically who will receive what on your death in your will.
Bear in mind that some sentimental items may also have significant monetary value, such as jewellery or paintings.
In that case, your executors may include the value of these items when calculating your estate, which could be liable for Inheritance Tax (IHT).
As a result, it may be worth looking for strategies that reduce this liability, such as gifting certain personal belongings during your lifetime.
Speak to an expert to find out more about how this works.
2. Choosing a guardian for your children
It’s important to plan for the worst-case scenario in your will, and that sadly includes the possibility that you pass away before your children legally become adults.
So, it may be a sensible course of action to choose guardians for your children in case this happens.
Despite being something that you might consider to be highly important, research from Will Aid shows that as many as one-third of parents haven’t done this.
If you were to pass away without having done so, the courts will decide who’s best positioned to care for your children.
Secure your children’s future by choosing their guardians if something happens to you. That way, you’ll have the peace of mind that they’ll be well looked after in your absence.
3. Deciding who will take care of your pets
For many people, their pets are as much a part of the family as their children. So, as well as making arrangements for your children, you should make sure there’s a plan in place for the future of your furry friend, too.
In the UK, pets are considered to be personal possessions. That means on your death, ownership will be automatically transferred to anyone you live with.
However, if you live alone and haven’t left any instructions, it will be up to your executors to decide what will happen. And, if your executors happen to be less sympathetic to your pet, they may decide on a new home that you wouldn’t want for your little companion.
That’s why you should decide what will happen to your pet if you pass away, naming who will take ownership of them if you die.
There are also many charities you can name in your will to this end. For example, the RSPCA’s Home for Life scheme promises to care for your pet and try to find them another loving home when you pass away.
4. Including details of any charitable donations
Whether you have a particular affiliation with the charity you want to gift to, or you’d simply like your wealth to make a positive social difference when you pass away, including a charitable donation in your will can be a great way to achieve either.
You could make charitable donations in your will to:
- Registered UK charities
- Religious organisations
- Political parties
- Sports clubs and similar non-profit societies.
Your gift could be money, an item, or even simply whatever’s left after other gifts in your will have been given out to your beneficiaries.
Alongside the altruistic reasons for doing so, there can be valuable IHT benefits from making charitable donations in your will too.
The amount left to a charitable organisation will not be included in your net estate, reducing the amount of taxable wealth you have for IHT purposes.
Additionally, if you leave at least 10% of your estate to charities and other similar organisations, HMRC will reduce your rate of IHT from 40% to 36%.
That means you may be able to use your wealth to both support causes that mean something to you, while also reducing how much tax your family have to pay on your death if your estate could be liable for IHT.
5. Setting out your funeral wishes
You can set detailed instructions in your will for the kind of funeral you’d like to have, allowing you to choose a service that most suits you.
You could even set aside money specifically to pay for your funeral, as they can be expensive. For example, the government website MoneyHelper estimates that the average cost of a cremation is £3,290, rising to £4,383 for a burial.
It can be quite a burden for your family to have to organise and pay for a funeral, all while dealing with the emotions of losing you.
Consider alleviating this burden entirely by leaving instructions and earmarking money specifically in your will for this.
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If you’d like to find out how we can help you plan your estate for later life, please contact us today.
Please note
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning, tax planning or will writing.
