Wills

 

Reasons to make a will

You can leave your property, money and other assets to the people you want. Without a will, the Government steps in and divides everything according to the Rules of Intestacy - which could mean the surviving spouse will not inherit the whole of your estate and also family, friends or charities you wanted to benefit would miss out altogether.

Your partner may not benefit. If you are not married or in a Civil Partnership your partner could end up with nothing if you die without a will.

You can choose your children's guardian. Your children's future can be protected if you choose a legal guardian to be responsible for their upbringing in the event of your death and the death of the other parent. If you do not specify anyone, it will be left to surviving relatives to sort out who looks after them, and it may end up being someone you would never have chosen yourself.

You can ensure your will is tax-efficient. This is important if the value of the estate is more than £300,000 and it will safeguard the money that goes to your family.

You can ensure your wishes are carried out. When making a will you also appoint executors who will carry out your wishes, including funeral arrangements.

Administering an estate can be easier where a Will has been made

What property passes by a Will?

Assets in your sole name will pass under the terms of the Will including everything from jewellery, cash, furniture, investments and your house

If you own some assets jointly (such as a house owned jointly with your spouse) then whether your half-share passes under the Will or not depends upon whether you own as 'joint tenants' or 'tenants in common'. If you own as tenants in common, then your share passes under your Will (or the intestacy rules). If you own as joint tenants, your half-share automatically passes to the survivor irrespective of the terms of the Will (or intestacy rules).

Property held in trust does not pass by your Will but according to the terms of the trust.

The proceeds of a life assurance policy will pass through your Will unless the policy is held in trust.

Lump sums payable under death-in-service benefits or pension plans pass according to the rules of the scheme.

Who can make a Will?

Anyone over the age of 18 and of “sound and disposing mind and memory”

Anyone under the age of 18 who are members of Her Majesty's Forces and even then only in specific circumstances.

 Marriage and divorce

If you have made a Will and then marry or enter into a Civil Partnership, the Will is automatically revoked and is invalid

A Will can be made in expectation of marriage or civil partnership so that the Will is not then revoked by that ceremony.

Divorce does not automatically revoke a Will, but any appointment of a spouse/civil partner as an executor and any gift to a former spouse/civil partner would not take effect. A Will should therefore be reviewed following a divorce or separation.

How should a Will be signed?

Writing out your wishes and signing them will not be sufficient - such a document is not legally valid and is not effective.

We will usually arrange for you to sign the Will at this office so that we can carefully explain the contents of the Will to you beforehand and also to ensure that all formalities are carried out.

 

What do you need to think about when making a Will?

Funeral Wishes can be included in the Will if you have any special wishes which you want your executors to be aware of

Appointment of Executor and Trustees - who do you want to deal with your estate, your spouse/partner/family/friends? If you do not want them to have the stress of dealing with your affairs then you may want to appoint a professional person such as a Solicitor or Accountant (who may charge a fee for this service)

Guardians of your children if you and their other parent dies whilst they are under 18.

Legacies to family/friends/charities of cash or specific items of property

Who gets the rest? Following payment of any debts, legacies, inheritance tax, funeral expenses and other administration expenses, you will need to decide who will benefit from the remainder? The surviving spouse or partner? Your children? A friend? How the residue of your estate is left is entirely up to you, the beneficiary(ies) can have the money straight away or it can be held on trust. We will discuss the various options available to you and tailor-make the will according to your wishes.

Inheritance tax and Wills

Under the current regime Inheritance Tax (IHT) is not chargeable on transfers between husband and wife or Civil Partners (the ‘spouse exemption’)

Gifts up to £300,000 (the nil rate band) can be made free of IHT to other individuals

Gifts on death in excess of £300,000 to someone other than a spouse/civil partner/charity attract tax of 40p per £. Gifts of any amount made during an individuals lifetime may be free of IHT if survived by seven years.

It follows from the above that a married couple or civil partners, in theory, can leave £600,000 IHT free to their children or other relatives on death.

Conventional Wills where each spouse/civil partner leaves his or her entire estate to the survivor effectively increases the final IHT bill by £120,000 (£300,000 at 40%)

It is necessary to utilise the nil rate band on the death of the first spouse/civil partner.

Few couples can afford to make an absolute gift of £300,000 on the first death as capital is needed to provide for the surviving spouse/ civil partner or the joint estate is taxable because of the value of the family home.

In such cases it is possible to minimise IHT and providing financial security for the surviving spouse/civil partner by creating a Discretionary Trust of the Nil Rate Band.

Altering or changing a Will

If you wish to make minor changes to your Will, such as changing your Executors, then a 'Codicil' can be drawn up to be read in conjunction with your Will.

If there are substantial changes to the Will we would normally advise you to make a new Will.

Writing over existing provisions in your Will will not be effective.

Reviewing your Will

You should review your Will every 3-5 years to take account of changes in your personal and financial circumstances.

 

 

How long does it take to draw up the Will?

We aim to send you a draft Will within 48 hours of your initial appointment.

If we are unable to send out a draft within this time we will advise you accordingly

We will work towards a final version that you are happy with and fully understand.

Once the draft is approved simply make an appointment and come into the office to sign the Will.

We can store the signed original at our offices, free of charge, and provide you with a photocopy for your records.

 

Related issues

1) Claims against the Estate

Under the Inheritance (Provision for Family & Dependants) Act 1975 it is possible for certain persons subsequently to make a claim against your estate if you have failed to make reasonable financial provision for them.

The persons who can make such a claim include a spouse/civil partner and also a former spouse/civil partner. A former spouse/civil partner cannot however make a claim if she or he has remarried or if the Court has barred such a claim on the grant of the divorce. A child can also make a claim as can any person who immediately before your death was being maintained wholly or partly by you.

Such a claim would normally have to be made within six months of the Grant of Probate being issued. If there is a possibility of a claim then your executors will probably defer distributing the bulk of your estate until after this time period has expired.

2) Enduring Powers of Attorney

The use of an Enduring Power of Attorney offers a very easy and inexpensive means of looking after another persons financial affairs and property

It is important to remember that the Donor of the Power must be mentally capable of signing the Enduring Power of Attorney.

The Enduring Power of Attorney needs to be drawn up in a form prescribed under the Enduring Powers of Attorney Act 1985 and before 1st October 2007 when the present system changes.

The Enduring Power of Attorney can be used by the appointed Attorneys to assist the Donor in managing their affairs whilst they have mental capacity

If the Attorneys have reason to believe that the Donor is becoming mentally incapable of managing their affairs, they are under a duty to register the Power with the Court of Protection (giving notice to the next of kin).

 

Once registered your Attorneys can continue to manage the Donors affairs without reference to the Court of Protection (except for a very limited number of matters).

Without an Enduring Power of Attorney in place, then when a person becomes mentally incapable of managing his or her affairs, a Receiver will have to be appointed by the Court of Protection.

The powers of a Receiver are limited and authority of the Court is often required before certain actions can be taken; receivership accounts also need to be filed with the Court each year. The Court makes an annual charge.

The costs of appointing Attorneys under an Enduring Power of Attorney are cheaper than the costs involved in a Receiver being appointed by the Court of Protection

3) Lasting Powers of Attorney

On 1st October 2007 the Enduring Power of Attorneys will be replaced by the Lasting Power of Attorney.

In addition to dealing with financial affairs and property the attorney can also make decisions concerning health and welfare, if the donor is no longer able to do so themselves.

LPAs will also allow a person to specify in what circumstances they do not wish life-sustaining medical treatment to be given.

LPAs, irrespective of the donors mental capacity, will have to be registered before they can be used.

The LPA forms are approximately eight times longer than the average five page EPA document which means an increase in costs for their completion

 

While we have made every effort to provide accurate information, the law is always changing and affects each person differently. This leaflet is no substitute for specific advice and we will not be liable to you if you rely on this leaflet.