At certain points of everyone’s lives most people think about leaving a will to loved ones, friends and charities. Whether you have just got married, started a family or have gained new members of your family, making a will and leaving gifts to certain people is essential in ensuring those you care for are cared for after you are no longer here.
Let’s go through a few things to think about when leaving a gift in your will.
There are few things that need to be thought about if you want to leave a gift in your will, whether these are gifts to family members or to a charity.
What gifts can I leave in a will?
According to Making a Will there are three types of gifts you can leave; Specific Gifts, Non-Specific Gifts and Residuary Gifts.
1. A Specific Gift is as it sounds, a particular item or a sum of money you want to leave someone. It is very important when you leave a gift in your will that you are very specific about what you want to leave. For example, if you want to leave your 1956 1965 Ford Mustang 289 V8 Fastback, make sure you specify that you want to leave your 1965 Ford Mustang 289 V8 Fastback to someone.
2. Non-Specific Gifts are gifts that are not referred to any item in particular, for example ‘all of my possessions’. Nice and easy!
3. Residual Gifts – this is the ‘residue’ of an estate after bills and debts are paid off and all specific and non-specific gifts have been given out. Leaving a the residue of an estate to someone is a common form of gift giving that ensures that all remaining assets are passed to your beneficiaries.
Is it entirely up to you who you leave your money, property or possessions to and the way you leave it to them. So, we know the types of gifts you can leave, but who can you leave them to?
Who can I leave gifts in my will to?
Anyone you want. Who you leave your gifts in your will to is entirely your choice and though it is a big decision to make, there are plenty of different options of who you can leave your estate to:
- Family – the obvious choice for most people.
- Friends – this is more popular than you may think!
- Charities – helping someone else and it helps to cut your inheritance tax bill.
- Trusts – You can leave your money and property to a trust committee that will be able to use your gifts as you choose to help people in the long run.
- Companies – Have you got a favourite company you’ve always followed? You can leave them your possessions.
Now you have chosen who you would like to leave your gifts to, now you should look at pitfalls to avoid when making a will or leaving a gift in your will.
10 avoidable pitfalls when leaving a gift in your will.
There are some very easy mistakes to make when making a will which could make life very difficult for your loved ones and could possibly make the gifts you leave unclaimable.
According to Funeral Legal Services the top ten avoidable mistakes are:
1. Your will being out of date – any life event should be a cue to check and amend your will if needs be. If you gain a new child, a new grandchild, get divorced or you have survived someone in your will, if you want to leave or not leave someone anything, this will have to be looked and changed.
2. Incorrectly signed and witnessed documents can lead to the invalidation of your will meaning that those you leave something to won’t be to access anything. To validate your will, it must be signed by TWO people. They must be over 18, UK citizens and not names as a beneficiary.
3. Not accounting for debts – Mortgages and other debts can eat into the gifts you leave. To prevent complications it is worth thinking about bequests as percentages of the estate rather than a sum.
4. DIY Wills can unfortunately cause a world of pain. Writing your will on a scrap of paper and signing it unfortunately does not cut it. There are some rules if what you say and how you say it. Should your DIY will not follow the rules, your language is not quite right or your intentions not clear, your will can be invalid.
5. Failing to appoint guidelines if you pass away and your children are under 18, you need to appoint people to look after them. Make sure you think of the children!
6. Forgotten Assets – Don’t you hate it when you forget about that Fabergé Egg under your mattress? Same here! Well if you forget to mention any assets they could be dealt with by the laws of intestacy and could be reliable for inheritance tax, and it could be a potential arguing point between your loved ones.
7. Not making proper exclusions can cause problems. Yes it sounds obvious but if you don’t officially exclude those you have become estranged to, they could try and claim your assets.
8. Appointing inappropriate executors can also be problematic. Those who live overseas, are under 18 or someone who just don’t feel capable of upholding the process can make an already sometimes drawn-out process even longer!
9. Not making provisions if gifts fail – Be clear what you would like to happen if for example a beneficiary of yours predeceases you. You should be specific about what you want to happen for example if a beneficiary dies before you, should the gift go to their children?
10. Not having a will at all – Be sure to have a will. If you pass away and there isn’t a will in place, those close to you will have a lot of pain trying to deal with your estate.
These are the easily avoidable mistakes that can be made that can make life a nightmare for those closest to you. Be sure to talk to a solicitor or a Will Service to ensure that you make your will properly.
Where have we got to so far? We now know you can leave a will to pretty much anyone you like and the avoidable mistakes that can be made, now we will talk about how you make a will and how to leave a gift.
How do I make a will and how do I leave a gift?
Making a will doesn’t have to be a complicated process. Once you have decided where you would like your money to go, you can create a will online, or you can speak to a solicitor about making a will and any gifts you want to leave. You can go through any questions you have, people or charities you would like to leave a gift to or anything else that you may want to know with them.
It is a relatively straight forward process but you can get guidance from your solicitor or from an online service to help you every step of the way.
Just don’t forget the 10 pitfalls listed above so you make sure everything is done properly and your will and gifts are safe.
What are the 5 reasons I should leave a gift in my will?
1. It can help cut inheritance tax – according to GOV.UK leaving certain amounts to charity in your will can help those you are leaving money or gifts to with the financial burden that the leaving of some estates may bring. There are even inheritance tax calculators that can help work this out.
2. You are leaving a lasting legacy for future generations – when you leave a gift to a charity, you are not only helping the charity fulfil its goals, but you are also helping those most in need. You can choose how the charity spend any money or uses any gifts left by yourself or you can leave it up to them. Be sure to mention how you would like a charity to use your gift.
3. You can help to support loved ones – Everyone needs a little help sometimes and by leaving a gift, you can ensure that your nearest and dearest are looked after later in life.
4. You can support a cause you are passionate about – have you always had a love or passion for something? Did a charity help you out once? Did you work for a charity? Did a company take good care of you when you were doing up your house? Leaving a gift in your will could be the perfect time to ensure that something you are passionate about can carry after you are gone and potentially help out those who need it the most. Your favourite charity may be able to support another 100 of their benefices with your gift.
5. To help remember a loved one – a lot of people leave a gift in their will to ensure the memory of someone lives on. If you leave your gift to a charity or a trust, you can ask them to carry out work either in your name or the name of a loved one who was also passionate about the work a charity does.
That is a lot of information but, these are the kind of things you need to know about when leaving a gift in your will. Who or why you chose to leave someone a gift is entirely up to you.
There are lots of services around that can help you compose your will and charities will happily give you any information on the process and any advice you may need.
Leaving a gift doesn’t have to be a daunting task and doesn’t have to be a sad occasion or subject to talk about.
Your gift can help future generations and ensure that those who most need it get the help they need and deserve.