Wills and trusts

Making a Last will and testament (or a Last will and testament for Scotland) is a crucial way of ensuring that your assets are distributed according to your wishes upon your death. Many people assume that their spouse or other specific individuals will inherit their property but, in the absence of a will, the 'intestacy rules' will determine what happens to your estate. If you have a partner who is not a spouse or civil partner, they will not necessarily be entitled to anything under these rules, so it's particularly important to have a will in this situation. For further information, read Intestacy rules and Intestacy rules in Scotland.

If there are any major changes in your life (eg the birth of a child, separation or divorce or dramatic financial changes) you must consider updating any existing will to take account of the new circumstances. For further information, read Reasons to make a will.

Initially, you'll need to choose your executors (or executrixes). These are the people who will carry out the wishes contained in your will following your death. There can be up to four executors (or executrixes) and they can also be beneficiaries under the will. 

In England and Wales, once they receive a grant of probate (which confirms that your will is valid) they can collect your assets, pay off any liabilities and distribute the legacies to your beneficiaries. For further information, read Probate. In Scotland, the executor(s) can apply for a grant of confirmation which grants them access to the deceased’s money and property, allowing them to ‘administer' the estate. For more information, read Confirmation in Scotland.

If you have children, you may want to appoint 'testamentary guardians' who will take over the role of parental responsibility if any of them are under 18 upon your death. You should also decide whether to leave any cash legacies, make any special bequests and how to apportion the rest of your estate. For more information, read Appoint a guardian.

In terms of correctly executing (ie formalising) your will, you need to ensure that it is signed in the presence of two witnesses. These witnesses must be over 18, cannot be executors or beneficiaries of your will and must not be related to you or to anyone mentioned in your will.

For further information read Making your will and Executing a will.

When you pass on assets, such as money and property, they may be subject to inheritance tax if the value of the assets is above a certain threshold. The executor (or executrix) of a will are responsible for calculating any inheritance tax due and must ensure that it is paid to HMRC. For further information, read Inheritance tax.

A Living will is where you express your wishes about how you want to be treated and cared for in certain situations. It refers to the advance statements or decisions you make about your care and wellbeing for the future. An advance statement is where you set out your likes and dislikes and your preferences about how you want to be cared for in the case where you can't make your own decisions. 

An advance decision to refuse medical treatment refers to the situation where you can refuse some medical treatments you don't want to receive. It deals with circumstances in which you might not want to be kept alive artificially and allows you to set out specific instructions. You can only create a living will if you are of sound mind and you should discuss the matter with your GP and your family first. An advance decision is legally binding and those caring for you must follow your instructions, even if refusing medical treatment may lead to your death. 

Trusts are a way of holding and managing money or other assets on behalf of a beneficiary (ie a child) or group of beneficiaries (ie multiple children).

Trusts are created by a ‘settlor’ who decides on the type and extent of assets (which can involve money, property, land and investments) that should be put into the trust. The settlor must also specify any beneficiaries who stand to gain from the trust. Finally, the settlor has to appoint a ‘trustee’ (or ‘trustees’) to manage the trust.

For more information, read Trusts.