Inheritance problems can cause messy emotional disputes between loved ones. You can often avoid such issues by drafting a will and telling your family about it. However, according to Sarah Coles, personal finance analyst at Hargreaves Lansdown, only two-thirds of Brits have a will, and only a third of us know whether our parents actually have a will or not.
The problem? Well, if your family doesn’t know what you want to happen after you die, they could be left feeling confused, stressed and overwhelmed. So, with this in mind, let’s run over seven ways you can avoid the most common inheritance issues.
Plot your path towards financial freedom with our Hero’s Journey tool!
MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.
This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.
1. Draft a will
If you don’t draft a will, you can’t decide what happens to your estate when you die. Instead, the law decides for you. The issue here is that there’s a good chance your loved ones won’t get the inheritance you intended them to have.
- Think about what you want to happen when you die.
- Update your will if your circumstances change (e.g. you get divorced).
- Tell your loved ones you have a will, and where they can find it (e.g. the lawyer’s office).
2. Get help with estate planning
A will is only useful if it’s legally valid. A will is not valid if:
- you don’t sign it properly
- it’s not witnessed
- it’s not the last will you wrote
- someone forced or pressured you into writing it
If there’s an issue over a will’s validity, the estate can’t settle until it’s resolved. So, to avoid inheritance stress, ask a qualified lawyer to help you draft a valid will.
Could you be rewarded for your everyday spending?
Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.
3. Wrap up your affairs
Where do you keep important documents like your birth certificate and life insurance policy? Ideally, you should keep your will and key documents together, because it’s much easier for an executor to distribute your estate quickly if your paperwork is easy to find.
- Make a list of all your assets and keep it alongside your will.
- Close any old accounts you don’t use – otherwise, it’s just more work for the executor.
- If you sell any assets listed in your will, make sure you take them out so the executor won’t look for them.
Are you self-employed? Leave a note of everything your executor could need to complete your tax returns.
4. Make your wishes known
It’s crucial that you talk to your family about your will. Why? Because if anything’s unclear or ill-defined, it could cause tensions between your loved ones.
- Be specific about the inheritance you want each person to receive. For example, don’t just say you want someone to have a few rings from your jewellery collection – set out which ones.
- If you change your mind about anything, tell your loved ones, and make sure you put the changes in your will.
5. Don’t overpromise anything
This one goes hand-in-hand with number four.
Essentially, don’t make promises you don’t intend to keep when you write your will. Otherwise, you’ll definitely cause some inheritance headaches when your loved ones see it!
So, for example, if you have two houses and you plan on leaving someone one house, don’t tell them they’re getting both properties, and so on.
6. Resolve existing disputes
If you know there’s a potential inheritance issue, try to resolve it right away or at least explain why you’re making certain decisions.
- Are you leaving one child more than the others? Explain your reasons in writing.
- If you choose to leave someone out of your will, again – set out your reasons why.
Keep these written records alongside your will so that the executor can find them easily.
7. Keep your requests reasonable
Finally, make sure you’re being fair to your executor. For example, if you want to set up something complex like a trust, ensure that the executor wants the responsibility before you appoint them to manage it. Otherwise, there’s a chance that the court will need to appoint a new executor, which will slow the process down and causes inheritance woes.
If you have a large or particularly complex estate, consider appointing a lawyer to act as executor for you instead.
Get help with inheritance issues
Many inheritance or estate planning issues can be avoided simply by drafting a valid will and ensuring everyone understands your wishes. If you want to write a will, contact a qualified wills and trusts lawyer for more help.
On the other hand, if you’re dealing with inheritance issues following a bereavement, reach out to Citizens Advice or consult a lawyer.
Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.