Do I Need a Will? #Hotline
Welcome back to The Hotline! Today we answer a question from Nicole. She is 35 years old and bought her first home a couple of years ago with her partner. Nicole asks us how to start when it comes to making a will.
The number 35-54 year-olds with a will has decreased from 37% in 2019 to 22.5% in 2021 – a decline of 39%. This means that fewer people are leaving instructions for their loved ones when they pass away. This week, we’re going to talk about who needs to have a will, and what the process entails.
💥 Today on The Wallet:
1️⃣ We’re joined by Kate Pentelow, founder of The Money Mummy, a friend of Vestpod and former financial advisor. Together, we open up the conversation around making a will. We know it can feel uncomfortable and emotional to do, so Kate tells us how we can best prepare for the process.
2️⃣ We discuss when the right time to make a will is, the different options available, and take a look at why, especially as women, it’s so important to be pragmatic and prepared if the worst were to happen.
3️⃣ We also have an inspirational proud money moment to share and a recommended episode from the Vestpod community.
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accept that making a will is important
A will is a legal document that outlines your wishes if anything were to happen to you.
When thinking about writing a will, it’s important to approach it in a purely pragmatic, and non-emotional way. It might be easier said than done, but when you look at the benefits of making a will.
If you die 'intestate', that is, without having made a will, there are no guarantees that your estate will be distributed as you would’ve liked. This can create huge burdens for your loved ones at an already difficult time.
Reasons for choosing to have a will include: choosing who your estate goes to, minimising tax liabilities, leaving some of your will to a life partner, making a gift to a charity or friend, considerations like making provisions for someone elderly or disabled, specifying your children’s inheritance, as well as assigning guardians and beneficiaries.
think about a will once you have an asset
While you can legally have a will from the age of 18+, it’s most common for people to write up a will once they have an asset, like a property.
Any form of ownership that you have got — whether that’s savings, inheritance or investments — are good trigger points for considering to finally go ahead and make a will.
Making a DIY will is not the best idea because it can get quite complex — you should consider getting external help, like from a solicitor, barrister or will writing specialists. Professionals will help you ensure that the will you’ve put together is watertight. It’s a good idea to use The Law Society website to help you find the right person for the job.
Typically, on average, wills cost between £150 - £250.
Emotionally prepare for the conversation
One of the reasons the stats are so low when it comes to will writing is because the conversation about your potential death is, of course, very morbid.
If you’ve never had this kind of conversation, the upside is that there’s no real way around it: you have to have it.
The solicitors are the experts in this area, so they’ll chat to you and if you find you can’t answer all the questions at that moment, at least you can go away and think about it / discuss it with someone so that you know who’s going to go into all those boxes in that piece of paper.
Assets that typically make up an estate include: your home, and any other property you own, savings in bank and building society accounts, National Savings, such as premium bonds, insurance, such as life assurance or an endowment policy, pension funds that include a lump sum payment on death, investments such as stocks and shares or investment trusts
vehicles, jewellery, antiques and other personal belongings.
You need to understand the different elements that make up a will. For example, executors are the people who will be responsible for carrying out your wishes and for sorting out the estate.
Once you make your will, you need to keep it in a very safe place — ideally, somewhere fireproof. It is sensible to also ask your solicitor to archive a draft (don’t forget to share this with your executors). You can also register it at a probate office or keep it in the digital world.
Remember that circumstances change, so you need to update your will (rule of thumb: do this every 5 years).
writing a will is especially important for women
Women tend to live longer than men, and we need to ensure our assets last longer.
We earn less during our lives, therefore there tends to be a reduction in the ability that we can save over time, which means we really need to get sound estate planning advice along the way.
More often than not, women tend to take care of the children in most situations, therefore will planning is especially important.
Resources:
Money Helper: https://www.moneyhelper.org.uk/en/family-and-care/death-and-bereavement/planning-what-to-leave-in-your-will
The Law Society https://www.lawsociety.org.uk/en
Probate Services: https://www.gov.uk/government/publications/store-a-will-with-the-probate-service
Connect with Kate:
Instagram: @The_Money_Mummy