The Complete Guide To Wills
This article outlines the different types of wills and introduces you to Power of Attorney.
Discussing finances with the family can be problematic at the best of times, but when it is conversations about a pretty morbid subject, it never feels like the right time.
As an adult child of older parents, it is important to find out what their plans are regarding all the elements of this guide, from Living Wills to Power of Attorney, as well as retirement and pension funds, life insurance and even what end-of-life care they might want.
It is easier to begin this conversation naturally, and make sure that it comes from a position of helping, not just trying to find out what you have been bequeathed. Don’t wait for a crisis to talk about this, and make sure your siblings and other family members know what is happening so that everyone can understand decisions.
Whenever you are discussing end-of-life issues, it can feel morbid – just remember to be sensitive and tactful.
To make this process easier, we have put together this complete guide to wills to shed some light on the subject and give you some direction in this conversation.
- The Complete Guide To Wills
- 1. Things to Consider When Making a Will
- 2. Writing Your Will
- 3. After the Will is Written
- 4. Other Considerations to Help you Look After your Parents
- Frequently Asked Questions
1. Things to Consider When Making a Will
Types of Wills
The will your parents will need depends on their personal circumstances and will range from the very simple – leaving their estate to a spouse, for example, to the very complex – dividing overseas properties or businesses to multiple beneficiaries.
The usual will types, such as a single will or a mirror will, can be very simple. As the name suggests, a single will is designed for just one person, but if your parents have the same beneficiaries in their wills, a mirror will may be a better option – ‘mirroring’ their bequests.
It is important to know the available options when it comes to creating a will. One of the questions that you might be asked is “can I write my own will?”. The simple answer is yes, but we recommend getting legal advice to make sure that the will is legally valid.
Can You Write Your Own Will?
Writing your own will is sometimes known as a DIY will and is usually considerably cheaper than a will writing service or a solicitor.
You can buy a template online or in stationery stores, and as a rule it will include legal terms and standard sections that you need to fill in accurately. It is important to make sure that it is signed, dated and witnesses properly – if there are any mistakes the document becomes invalid.
In order to use a simple, DIY will you need to have straightforward terms – this option is not suitable if you aren’t married, want to benefit stepchildren, own property abroad or have complex wishes.
If there is even the smallest complication, the initial cost saving might be outweighed by the problems it could cause later, after their death, when you are unable to carry out your parents’ wishes due to an invalidated will.
Will Writing Service
A professional will writing service will either have a face-to-face appointment with your parents to discuss their needs or provide a link to fill in required information online.
A face-to-face meeting will likely take place in your parent’s home, making this a convenient and hassle-free option for those with limited time or mobility. During this meeting, the will writer will ask questions to learn about their:
- Beneficiaries (including the proportions of bequests and specific gifts)
- Charitable Legacies
After this, they will create a draft will for them to check, and if they are happy, they can sign.
This service is a good option for people who have a basic understanding about wills but need some extra advice. This costs less than a solicitor and there is a wide choice of companies to choose from who offer this service. Make sure that you choose a will writing service that belongs to the Society of Will Writers or the Institute of Professional Will Writers – this sector is not regulated in the same way as solicitors, so choosing a practitioner that is one of those ensures that they have regularly updated training, are insured to cover any legal costs and follow an approved code of practice.
Using a Solicitor
The safest option to make sure that your parents’ wishes are followed upon their death is to appoint a solicitor to create their will. This is the most expensive option, but it carries the most peace of mind as you know there will be no mistakes or loopholes.With costs ranging from around £150 for a simple will, to £600+ for a specialist will, it is important to shop around and find a solicitor that offers the service your parents need at the best price.
Do I need a solicitor?
Using a solicitor will suit your parents if:
● They want complete peace of mind regarding their will
● They have overseas assets and property
● They want to reduce their Inheritance Tax bill
● Their family structure is complicated (unmarried, step-children etc)
● They have ownership (or part ownership) of a business as part of the estate
A solicitor is a good option if you want somewhere safe to store your parent’s will, and they can also be appointed as an executor.
2. Writing Your Will
When your parents have made a decision about the type of will they want to create, they need to think carefully about specific things to include, and then who they are going to get to write it.
What to Include in a Will?
The first thing they probably want to discuss is who will benefit from their will. These are known as beneficiaries. They might include:
● Children/other family members
When deciding what your parents are doing about their estate, they need to assess their assets and their worth. Some assets will have a fixed value, such as savings and heirlooms. Other assets are harder to estimate the value of as this changes over time, like:
Your parents might also want to think about whether there are any sentimental items they would like to give as a specific gift to a beneficiary.
When deciding how to split the estate, there are several types of legacy to use:
● Pecuniary bequest (a fixed sum, named in the will)
● Specific bequest (a particular item maching the given description, for a specific beneficiary)
● Residual bequest (percentage of estate worth after costs have been paid)
● Reversionary bequest (specify what happens to estate following the death of the beneficiary)
● Trust (providing immediate benefit to someone who needs extra support)
If your parent’s estate is valued at over £325,000 it will be liable for Inheritance Tax. They might want to consider ways to reduce their Inheritance Tax, starting with these ideas:
● Give everything above the threshold to a spouse or partner
● Give everything above the threshold to an exempt charity
Inheritance Tax is complicated, and if you are concerned about it, we suggest you seek legal advice. You can easily find some no-nonsense advice online, and in particular, we recommend this article on the Money Saving Expert website.
As part of their will, your parents might want to think of ways to protect their beneficiaries. This might include holding property in trust, keeping money aside until they reach adulthood or many other stipulations that are best discussed with a solicitor.
Finding Free Legal Advice
When you are beginning to think about helping your parents write their will, getting legal advice is important. You can contact Citizens Advice. Citizens Advice can provide information and free advice whether in person or over the phone.
Legal Aid is available for those in certain circumstances, and it is worth speaking to a solicitor to see if this can apply to your parents. When it comes to finding a solicitor, the Law Society has a search facility that can specify not only geographical locations, but also specialities. As a regulatory body, they hold up to date information regarding all types of legal advice.
3. After the Will is Written
Choosing an Executor
As part of the will writing process, your parents will need to name at least one person to become their Executor. This person will carry out the instructions in the will, from paying off debts, to ensuring that bequests reach their intended beneficiaries. This can be a complicated process, so you need to help them choose someone who will be able to cope with the paperwork.
The executor can be anyone over the age of 18 and can be a beneficiary. Most people choose a spouse or an adult child. Be prepared to be asked to be an executor for your parents.
Your parents can have up to four executors, but they must act jointly, so it might be best for them to look at a maximum of two people – that way, you are covered if one is unable. You might want to suggest a family member and a solicitor, for example.
Make sure the executors are happy to take the role on before naming them and remember that if your parents use a professional like a solicitor, they might charge for this.
The will needs to be stored in a safe, yet accessible location. There are no laws about where to store the will, but it needs to be somewhere that your parents (and their executors) can get it when necessary.
The options include leaving with a solicitor or a will writing service, lodging it with the Probate Service, or keeping it themselves, in a safe (for example).
What Happens if They Don’t Make a Will?
If your parents die without making a will, they don’t have a say in how their estate is divided. As a rule, your parent’s spouse or civil partner will inherit the first £250,000 of the estate, and half of whatever remains. Their children will receive equal shares of whatever remains.
If your parents are not married or in a civil partnership, there is no automatic right for their partner to inherit anything. Other, more complicated rules can apply too – but quite apart from the nitty gritty financial issues, it can cause further distress and concern for the family at what is already a trying time – and this is why it is so important to have this (difficult) conversation before there is a crisis.
4. Other Considerations to Help you Look After your Parents
Living Wills and Power of Attorney
If your parents are concerned about making decisions as they age, you might want to consider discussing a Living Will and Power of Attorney.
What is a Living Will?
A Living Will is a way to make advanced decisions regarding care when your parents are no longer able to make those decisions for themselves.
Generally, the Living Will makes advance decisions about medical treatment, including lifesaving treatment, in the event of your parents becoming unable to make or communicate those decisions themselves.
It might include care options, residence and religious beliefs, as well as whether your parents would like to receive lifesaving treatment in the event of an emergency.
It is a good idea to put these advance decisions in writing and make sure that their medical care team are aware.
What is a Power of Attorney?
In simple terms, a Power of Attorney is a legal document that appoints someone to make decisions for you and act on your behalf when you are no longer able to make your own decisions.
There are two main types; the Ordinary Power of Attorney (OPA) and the Lasting Power of Attorney (LPA).
Ordinary Power of Attorney
Provides temporary cover for financial decisions if your parents are unable to make those decisions due to a stay in hospital, for example. During that time bills still need to be paid, and a spouse will not usually have the authority to deal with financial matters. Appointing them, or someone else, as your parent’s Attorney will give them the authority to make financial decisions on their behalf.
This is a simple process, and you can find out more from the Citizens Advice Bureau or your local solicitors who can create the OPA for you, at a cost of approximately £150.
Lasting Power of Attorney
The LPA should be set up to make sure your parents are covered in the future – especially if they are diagnosed with a medical condition that affects their mental capacity and is likely to make it difficult for them to make and communicate decisions later in life, like dementia.
Mental capacity is described as the ability to make and communicate decisions at the time they need to be made. With mental capacity, a person might be able to make some decisions but not others, or they might need some extra time and support to be able to make their own decisions.
A separate LPA needs to be registered for financial affairs and for health and care.
LPA for Financial Decisions
This LPA appoints an attorney who is responsible for anything financial, from paying bills, buying and selling property to investing and spending. This attorney needs to keep separate accounts and be able to provide reports when asked by family members.
LPA for Health and Care Decisions
The Care LPA will be able to make decisions regarding care, residence, what food and drink they want to eat, any social activities and who they can have contact with. The Care Attorney can also make decisions on your parent’s behalf about whether they receive life-saving treatment if they are required to.
An LPA form can be downloaded from The Office of the Public Guardian (OPG), and are simple enough to fill out for yourself. They do need to be registered with the OPG in order to be valid, and this is a one-off cost of £82.
If your parents don’t have a Power of Attorney, and they lose mental capacity, a deputy might be appointed to make financial decisions on their behalf by the Court of Protection. They have similar authority to an attorney, although the process to appoint one can be a lengthy and costly process.
Relatives can apply to be a deputy for a loved one, and the Court of Protection will assess their suitability.
Here at ElWell we want to support you in supporting your parents – and we know that this can be a prickly subject to discuss. Why not take this opportunity to look at your own will and life insurance too? If you want any help or guidance about supporting your parents as they age, why not reach out to our team?
We promised you the complete guide to wills, and we like to think we delivered! Wills are a daunting process, not only because we can easily get confused by the legal nature, but also because it’s a scary topic to think about. Planning ahead and getting your wills and power of attorney agreed is important. Good luck!
Frequently Asked Questions
Yes, in theory you can. Writing your own will is sometimes known as a DIY will and is usually considerably cheaper than a will writing service or a solicitor. You can buy a template online or in stationery stores, and as a rule it will include legal terms and standard sections that you need to fill in accurately. It is important to make sure that it is signed, dated and witnesses properly – if there are any mistakes the document becomes invalid. In order to use a simple, DIY will you need to have straightforward terms.