Writing your will? Make just one of these mistakes and your family may NEVER forgive you

Inheritance tax explained by Interactive Investor expert

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Your worldly wealth could go to the wrong people or more of it could end up in the hands of HM Revenue & Customs. Mistakes can be so costly so take action to make sure your last will and testament is watertight.

Millions of adults have never written a will, which means their wealth could go to the wrong people when they die. Others have written a will but either made mistakes or failed to update it in line with change in family circumstances.

Everybody should check their will is up-to-date or risk leaving a financial mess behind them, warns Clare Moffat, pensions and legal expert at insurer Royal London.

“More than half of adults don’t have a valid will, rising to eight in 10 for those aged between 18 and 34,” she says.

Among those who do have a will, three in 10 haven’t reviewed it in more than five years.

She says there are five mistakes people make when writing a will.

Never get down to it. Too many people keep putting it off. “Having a valid, up-to-date will is an important step in making sure your assets go to those you want to receive them.”

You may not think you have many assets to pass on, but if you own a house, it’s important to include it in your will.

She adds: “If you have children, you need to set out who you would like to be responsible for their care.”

Moffat says writing a will may seem tedious task, but nine in 10 people who did it described the process as “easy” afterwards.

Forget to update it. Think of your will as a live document, that reflects where you are in life at a particular point.

“If you’ve recently been through a big life event such as marriage, divorce, or you’ve bought a house or had children, make sure your will reflects your new circumstances.”

Otherwise you could leave your money to a former spouse, rather than your current partner, or recent children may be left out. This can cause huge family arguments and destroy your legacy.

Fail to provide for a cohabiting partner. It is vital that cohabiting couples keep an up-to-date will as they do not have the same automatic inheritance rights as those who are married, Moffat says. “This means that anything which belonged to the partner who dies will usually go to their relatives, even if they have cohabited with their partner for years.”

There is no such thing as a common law wife or husband with inheritance rights, contrary to what many people believe.

Keep your will a secret. While no one likes to talk about death, it’s essential you have these uncomfortable conversations with loved ones to avoid causing problems for them after you’re gone, she adds.

“Once you’ve written a will, make sure your next of kin, and your chosen executor know where to find it. This applies to all of your financial documents.”

Forget to include your pension. You pension won’t normally form part of your estate when you die, so won’t be covered by your will.

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Instead, you should make sure that you fill in a nomination of beneficiary form, so that the pension scheme knows who you would like to receive it, Moffat says. “In some cases, the pension can be worth as much or more than the value of assets in the estate.”

Pension benefits can typically be passed to loved ones free of inheritance tax, making this even more valuable.

March is Free Wills Month, selected solicitors offer free will-writing services for people over 55 across England, Scotland Wales.

In exchange you can leave something in your will to charity.

Becky O’Connor, head of pensions and savings at Interactive Investor, says there is a lot of money at stake so a little time writing your will now will go a long way. “Get down to it sooner rather than later.”

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