Importance of a Will
Firstly, your personal gold and jewellery must be included in a Will, this will ensure that these items are bequeathed to the intended beneficiaries. This can be included by doing the following:
The reality is that you cannot distribute jewellery equally amongst several beneficiaries as it would involve cutting each piece of jewellery into several pieces in order for it to be "equal".
Therefore, the more prudent approach is to specify the jewellery e.g. bracelet to son, diamond necklace to daughter, wedding rings to second daughter and everything else to sister.
If you do not have a Will in place, then your gold and jewellery, along with any additional personal possessions will be distributed via the rules of intestacy which could risk your belongings being distributed against your wishes. Here is a link to a government website that explains the rules of intestacy: https://www.gov.uk/inherits-someone-dies-without-will.
However, you may also like to be more flexible, as you acquire further pieces, or your family grows and expands. For instance, you may wish to pass some of your jewellery to your grandchildren. Therefore, making a letter of wishes may offer some flexibility when bequeathing specific pieces of jewellery.
What is a Letter of Wishes?
A letter of wishes is a document that accompanies a Will, providing guidance to the executors or trustees on how the testator would like their estate to be managed and distributed. While it is not legally binding, it serves as an informal way to express personal preferences and intentions that are not covered in the Will. Here are some key aspects of a letter of wishes:
One of the benefits for a Letter of Wishes is that you can update it during your lifetime, without the requirement to pay a professional to update your formal Will. Therefore, your jewellery, and other personal possessions can be bequeathed correctly to your children, grandchildren, and other family members as your circumstances change.
Please access our downloadable free gold and jewellery log: view here
Should you Value the jewellery?
It is crucial to accurately value jewellery during probate, in order to ensure the correct tax calculation is provided. Please see the government link below for further information on valuing a deceased’s estate: How to value an estate for Inheritance Tax and report its value: Estimate the estate’s value - GOV.UK.
During the probate process, jewellery is classed as a “chattel”, which refers to a personal possession or movable property. Chattels can encompass a wide range of items, such as furniture, vehicles, jewellery, and other personal belongings.
It is the duty of an executor to ensure proper records are kept of a deceased’s chattels, which will thereafter be distributed according to their Will and Letter of Wishes.
The executor should obtain approval from all the beneficiaries before disposing of any of the jewellery in case it has sentimental value for some of the beneficiaries.
It is also important for the executor to obtain professional valuations of the jewellery to ensure compliance with HMRC guidelines. You may be at risk of HM Revenue & Customs imposing penalties if assets are valued inaccurately. Here are the general categories of penalties imposed by the HMRC:
Please see link to HMRC Inheritance Tax Manual for further information: IHTM36023 - Late accounts: penalties chargeable - HMRC internal manual - GOV.UK
Therefore, it may be prudent for the executor to contact an experienced jeweller and obtain expert appraisal.
Obtaining Valuation for a Will
It is recommended that you should obtain expert valuations on your gold when you write your Will. Here are some reasons why this is beneficial:
If you decide not to value your jewellery when make your will then at the very least, you should ensure that each piece is described accurately and that it is bequeathed to specific named beneficiaries.
Can family disputes arise about jewellery distribution under a will?
Sometimes, who gets what from a parent’s estate can become a source of friction and resentment, especially if a family member feels they had been “promised” a particular item or keepsake.
The chances are that you will have personal possessions that you’d like to be handed on to your family and friends when you die. For example, you may want family jewellery to go to your daughter, a watch to a cousin, or a bracelet to be given to a close friend. If that’s the case, it makes sense to record your wishes so that your executors can ensure they are followed.
Often it is the little things that cause conflict and dispute between family members, we would advise against assuming that things will simply sort themselves out when the time comes. At Ash Hill Solicitors when we draft your bespoke will we insert clauses to prevent dispute from arising in your family.
We encourage you to have open communication with your family before making your will. Although it might be a difficult conversation to have, there are clear merits to having an open discussion with other family members. Deciding as a family what should happen to personal possessions can help prevent future disputes.
Our advice is to have a ‘Letter of Wishes’ drawn up to be read alongside the Will. Arguably it is not appropriate for such (often quite personal) detail surrounding who should get what and why to be included within the Will itself, bearing in mind this is a document of public record once probate has been granted.
A Letter of Wishes provides an explanation for your beneficiaries to read and hopefully prevent conflict arising. When dealing with collections of things such as jewellery or memorabilia, it can make sense to keep a photograph together with a brief description, so that each piece can be clearly identified by your Executor when the time comes.
Cluttering a Will with details surrounding personal possessions and lists of particular items can also cause complications from an Inheritance Tax standpoint and is rarely a good idea. Over the years, the chances are that you’ll dispose of certain belongings and acquire new ones, which would mean you would have to consider updating your Will more often than you might feel necessary.
At Ash Hill Solicitors, we provide expert advice in drafting your Will and Letter of Wishes based on your personal circumstances.
Deathbed Gift
If a gift has been given by a person in anticipation of their impending death, certain conditions need to be satisfied. You can read more about deathbed gifts on our blog post: What is a Death Bed Gift?
Contact us
Call us today so that we can assist you in securing your jewellery: 02085152790 or visit our website for further information - https://www.ashhillsolicitors.co.uk/.
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