Forgive us for dealing with a dark topic, but it’s all in the interest of advice and guidance! Making a will is something that’s fallen out of favour with the British public, with close to two-thirds of UK adults having neglected this vital (and relatively simple) task.

Reasons vary, but generally it’s down to people just not getting around to it. So-called ‘life admin’ often gets put on the back-burner.

Making a will is important, but arguably even more so as a freelancer. Without a will, an individual is legally defined as being ‘intestate’ which means specific legal rules of intestacy are applied to the person’s belongings. Generally, intestacy looks for familial connections such as spouses and children before divvying up the estate of an individual. Herein lies two problems: intestacy rules set certain requirements on how an estate is divvied up to those individuals and it what quantities (which aren’t necessarily favourable), and always prevents other connections from claiming on an estate. These include unmarried partners, friends, and carers.

There’s another major reason that making a will is a good idea if you’re a freelancer, and that’s the issue of executors. A will is often viewed as dealing with someone’s possessions when they pass away. However, a huge part of it is actually the process of designated someone to begin undertaking important actions after death. A will defines what needs to be done, and who should do those things.

Freelancers without a will

Many of the issues going forward are dependent on whether you run your business as a sole trader or as a limited company.

As a sole trader

There’s no real distinction between individual and business finances as a sole trader, and thus without a will your earnings are viewed under the lens of intestacy, meaning many of them may get taken by the state and aren’t claimable by the loved ones in your life.

Meanwhile, there’ll be no one designated to complete tasks either. As freelancers, we typically have tax bills that are due, contracts that may be incomplete, invoices that are due to be paid. Not having anyone to deal with these things can muddy the water legally, whereas defining an executor in your will means these things can be covered.

As a limited company

If you’ve set up your business as a limited company, then making a will is even more vital.

Without a will, intestacy comes into effect, meaning that the business could be passed onto the state or the nearest family connection. Certain family connections are valued more highly than others, meaning you don’t get to choose who becomes the owner of the business–it’s simply defined by the rules that are in place.

Having a will lets you put a plan in place. In this case, your business will be viewed as a part of your estate and will be passed on through shares. This gives you more options in terms of how you want to pass the business on. If you have two children, for example, you can provide equal shares to both of them. This will enable them to continue to run, build, and get paid from the business in the future. Alternatively, they can choose to sell to anyone else who was a shareholder in the limited company.

On a more emotional level, making a will also means you won’t burden loved ones by leaving the business in their hands at a time when they may want to grieve. Ask yourself if there’s someone else who’d be better placed in tying up business affairs. You can make a Partnership Agreement with them to ensure that they can action issues that may crop up, and only bring in your loved ones as and when they’re ready.

Steps to making a will

Again, we know this is a dark topic, but having a will to hand is about peace of mind. In fact, life insurance policies are as popular as ever, and yet fewer people are making wills. The thing is, making a will is actually very easy. At the very least, it’ll save the people around you from a few headaches here and there by having a clear plan to follow in any unfortunate events. At best, it could be the difference between them inheriting your estate and not.

Here are the simple steps to undertake to get your will together.

1. Get your estate valued
Getting a value for estate is key. Understanding what it consists of is the first step. This will include everything from your home to your business to your chattels.

2. Get your business valued
If your business is a limited company, your accountant can help you get a value together for it so that the shares and information can be included accurately in your will.

3. Do you need a partnership agreement?
For limited companies, it may be worth putting together a partnership agreement with someone you trust to undertake tasks within the business itself upon the event of death.

4. Choose your executors
Whether you’re a limited company or not, executors will undertake many of the tasks set following death. This could include handling your finances, distributing your estate, and finalising business tasks too. For sole traders, executors are more likely to be involved in dealing with business tasks, as this responsibility falls to the new shareholders with a limited company.

5. Make your will
Once all of this is covered, it’s time to write your will. Remember, this is chiefly about how your estate will be divided, but also lays out the tasks that executors need to undertake. It’s worth having your will checked by a solicitor to ensure the information is accurately and legally-binding.

6. Peace of mind
That’s it! Job’s done, and you can enjoy the peace of mind of completing your will and having all the information needed legally enshrined. It’s worth revisiting your will occasionally to update information and figures, particularly as your freelance business may increase in value if it’s a limited company, but other than that, you’re done.

If you need help with valuing your business during the process of writing a will, don’t hesitate to come and have a chat with us. We’d be happy to help!

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