In our previous blog, we discussed the importance of having a Will to ensure that the contents of your estate are distributed according to your wishes after you die. In this article we cover the different types of Will available.
Whilst the name may suggest this is the most suitable Will for people who are not in a relationship or divorced, that isn’t necessarily the case. Whilst single people can make a single Will, you can also make one if you are married, in a civil partnership or a relationship.
A single Will is usually the best option if your partner already has their own Will or if your wishes are different to those of your partner/spouse.
Mirror Wills are often a cost-effective solution for couples, married or not, who have almost identical wishes and are often beneficiaries of each other’s Wills should the other die first.
While the main contents of the Wills ‘mirror’ each other, two separate documents are produced, one for each person, providing the added flexibility to include a few personal requests within, such as if you have different funeral preferences.
One important feature of a mirror Will is that either person can change their Will without the other person knowing, even after the first person has died, meaning you cannot be certain of the other person’s wishes staying the same as yours.
If you have concerns about this happening, or if your wishes change to those of your partner, then a single Will may be the better option.
Like mirror Wills, mutual Wills are comprised of two separate documents. However, they include a promise that the survivor will not make any changes later.
A joint Will is one single document signed by both parties. They often leave everything to the surviving partner, with further instructions on who is to inherit the estate once the second partner dies. Like mutual Wills, the surviving partner cannot make changes to the Will.
Conditional or Contingent Wills
With Conditional or Contingent Wills, the contents within are only valid if certain conditions are met. A common example is the beneficiary reaching a certain age. Should the conditions of the Will not be met, the estate will be distributed as if there were no Will, unless the person has another Will that can be used in place of the Conditional or Contingent Will.
Whereas standard Wills come into play upon your death, a living Will comes into force whilst you are still alive. They can be created in addition to a standard Will. They are useful for those who fear they may not be of sound mind at some point in the future, perhaps due to a degenerative illness, such as Alzheimer’s. Rather than setting out what happens to your estate after you die, a living Will details your wishes for future care, for example, your resuscitation or blood transfusion preferences. By law, medical professionals are required to adhere to a living Will should you require treatment.
A video Will allows a person to verbally explain how they wish the contents of their Will to be distributed. Whilst a video Will alone may not be accepted in many countries, they can be used as a supplementary tool if the person wishes to explain in more detail the emotions behind their decisions and to also prove they were of sound mind at the time their Will was written if there is a chance that there may be a challenge to the Will contents after they die.
There are also several different types of trust Wills, which will be covered in a later article.
For further advice, please speak to your Finura Partners adviser.
The Financial Conduct Authority (FCA) does not regulate Will Writing/Trusts/Tax Advice or Estate Planning.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Furthermore, this article contains links to external sources of information which we believe you will find useful. However, we are not responsible for the content or integrity of any external websites and, as such, accept no liability for any viruses or malware connected to those sites and any resultant damage caused.
As tax year end approaches, there is still time to make use of your available reliefs and allowances.
This tax year end planning checklist covers the main planning opportunities available to UK resident individuals and will hopefully help to inspire action to reduce tax for the 2023/24 tax year and to plan ahead for 2024/25.
As tax rate band thresholds are changing, understanding the impact on high rate taxpayers and the economy is crucial.
It was recently revealed in the media that the amount we need to enjoy a ‘moderate’ retirement has increased by £8,000 per annum, a 38% increase, in just one year.