The many reasons you need a will

By David Lamb CFP™ MCSI

Many people do not make wills. The most common reasons for this are procrastination, fear of tempting the ‘Grim Reaper’, not being able to decide who should inherit, not wanting to pay the fees or thinking that assets will pass automatically to the family.

Then there are the people who are just selfish and don’t care what happens after they have gone.

There are many reasons to make a will, which could include:

  • To name guardians for children
    • If you do not state who should look after your children, should you die, the family courts may need to choose a guardian. This may not be somebody you would agree to.
  • To provide for financial dependents including stepchildren
    • This may include allocating funds for education or a deposit on their first home. Stepchildren will not automatically inherit, which may not be your wish if they are a big part of your life.
  • To protect partners
    • Unmarried partners will not automatically inherit if there is no will.  This could include the family home.
  • To avoid family disputes
    • Family arguments often arise when the deceased is intestate and can be costly and damage family relationships.
  • Inheritance tax planning
    • Writing a will can be a good opportunity for inheritance planning which, don’t forget, is a tax on accumulated assets after paying tax.
  • Who will take care of your pets?
    • You may also want to allocate money for food and healthcare.
  • To protect your digital assets
    • What do you want to happen to your music, photographs, emails etc? How can people access these? Can your passwords be located?

There may also be issues with your beneficiaries:

  • Are they responsible enough to benefit? If not, what could the possible consequences be?
  • Your beneficiary’s legacy may be lost should they be involved in divorce or bankruptcy proceedings at the time of inheriting. Do you want your potential ex son, or daughter in law, to effectively inherit your assets?
  • Ultimately, who will benefit from your personal assets your children, or your stepchildren? Or even your surviving partner’s new partner!

Death in service benefits and pension death benefits can be very flexible, with a little planning, but many people do not give much consideration to nominating beneficiaries, losing out on huge potential benefits.

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