Your Will - Trustees
Your Will - Discretionary trusts
Your Will - Giving to charities
Your Will - Important drafting points
Your Will - Inheritance and children
Your Will - Inheritance tax strategies
Your Will - Living Wills
Your Will - Marriage and divorce
Your Will - Medical use of your body
Your Will - Mutual wills and mirror wills
Your Will - Post mortem tax planning
Your Will - Property you can leave by will
Your Will - Revoking wills
Your Will - Choosing executors
Your Will - Why make a will
Your Will - Keeping it within the family
Why make a will?
He or she? For ease of expression, and with no disrespect to the female gender, we use the male pronoun in this web site.
1) You think you have only debts
You may be wrong – you are often worth more than you imagine. You might die in a motor accident, when your estate can claim many thousands of pounds. You might still own long forgotten mortgage support policies or other endowment policies which may be worth substantial sums on your death. You may have pension provisions with a lump sum value on death.
2) You are young and will not die for a long time
With luck, you may be right. But you would make a mistake to view a will as something for old people. Treat it more as insurance. It is a very low cost cover for the horrors that could occur if you did die without a will
3) Do it your way
Your will is your last opportunity to have a “say” in your own affairs. Surely you would not throw up this opportunity when you have spent the rest of your life “doing things your way”!
4) Who will bring up your children
This important issue cannot be covered entirely in your will, of course. Ideally, you should consult with friends and relatives and obtain their acceptance of whatever decision seems best for your family. Your will remains the best place to record this. Suppose both parents die in the same accident. Without this record, your children could be brought up by people you consider quite unsuitable, or even taken into care.
If you are an unmarried mother, you can appoint a guardian to your children by will. This is important because your children's father does not necessarily have the legal powers of a parent nor become their guardian.
5) Matrimonial problems could loom
A surviving spouse comes high up the list of beneficiaries if you leave no will. So, if your marriage has broken down but no divorce has been finalised, your surviving spouse (now your “ex”) might inherit the whole or a share of your estate.
6) Your life partner will be ignored
If you live with someone with whom you are not married, and you die intestate, your life partner has no automatic right to inherit anything from you.
7) They may have to sell your house
If your home makes up a high proportion of the value of your estate, your surviving spouse or life partner might be compelled to sell it to fund payments for tax or to children or other relatives.
8) Tax, tax and more tax. Do you really want to give your money to the state?
At the time of writing this, inheritance tax kicks in at only £263,000. That includes gifts you have made in the seven years before your death. Inheritance tax is important in your affairs, so we have a section explaining it in simple terms. We also have a page covering basic simple advice about how to pay less tax and what other pitfalls may ensue.
The fact is that if you have a house worth £200,000, and have a mortgage protection, endowment or life policy, and you are contributing to a pension, you could well find that you have an inheritance tax problem your estate may well pay IHT on virtually everything else you leave. At 40% it bites very hard.
You probably know that what your spouse (but not an unmarried partner) inherits from you is free from inheritance tax on your death, but in the longer term that is of no help. When he or she dies, the value will just make his / her estate even larger and may well throw the rate into higher bands than 40%.
All this bad news adds up to a proposition that you really must make a will.
If you do not make a will …
Administrator(s) will be appointed
If you die without making a will (called “intestate”) your estate will be would up by one or more administrators. They have the same function as executors, the name given to those appointed by you in your will.
If the value of your estate is under £5,000 no one need be appointed. To be appointed, application must be made to the Probate Registry, a division of the High Court. Occasionally more than one person or set of people apply. In that case a judge would decide who has priority. Generally it is clear from the relationships of individual people who has the best qualification. Here is the order of priority:
1. Your spouse (or if he or she has survived you but dies before obtaining Letters of Administration of your estate, his or her personal representative).
2. Your children (or, failing them, your grand children)
3. Your father and mother
4. Your full brothers and sisters or their children
5. Your half brothers and sisters or their children
6. Your grandparents
7. Your uncles and aunts or your first cousins
8. Your half blood uncles, aunts and first cousins
9. The Crown
10. Your creditors
Relatives by marriage do not qualify in any category except the first.
Who will inherit your estate?
· The law divides your relatives into classes such as children, siblings, grandparents, and so on. All members of any class inherit in equal shares.
· Once even one person has been identified in a class, then all lower priority classes are excluded. Your assets are divided among however many or few members there are of the priority class. There is an exception to this for close family as you will see below.
· If a member of a class dies before you and leaves issue (children or grand children) who survive you, the issue inherit equally between them the share which their parent would have inherited had he survived you.
· If anyone entitled to inherit is under the age of 18, the inheritance is held in trust for them until they either reach the age of 18 or marry under that age.
· If your spouse does not survive you by 28 days your estate is distributed as if he or she had not survived you.
· Net estate means the estate after deducting all debts, liabilities, inheritance tax and funeral and testamentary expenses.
This is the order of priority of inheritance
· Your surviving spouse (but not life partner). The amount he will receive depends on the size of your estate and whether or not there are any surviving children, grandchildren, parents, brothers or sisters.
· Provided your spouse survives you by 28 days, and there are no persons in any of the above categories, then he will inherit your entire estate.
· Your spouse is entitled to your personal chattels (which we call “possessions” on this web site) in any event and whoever else is alive.
· Your spouse is also entitled to receive what is known as the “statutory legacy” and interest from the date of your death at the rate of 6 per cent until payment. The statutory legacy today is £125,000.
· There are further rules for division of your estate beyond that.
Net Lawman offers 17 different will templates. They are listed and explained here.
A full list of help articles about wills is listed top of this page.
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