Why should I make a Will?

Assumptions as to who may inherit your property and money are often wrong. The only way to be certain that the people you want to inherit will actually do so is to make a Will.

If you were to die intestate (without a Will) the administration of your estate would follow a strict set of rules and your property may not go to your intended beneficiaries. For example, if you were married with children, your property would pass to your spouse only up to a set limit. If the value of your house exceeds that figure then it would not be wholly owned by your spouse, as your children would be entitled to some of the estate. If you are married with no children and die without making a Will, your parents or if they had already died, your brothers and sisters or their children could inherit a share of your estate. Unmarried couples living together need to remember that they do not automatically inherit anything.

It is particularly important to draw up a Will for a variety of reasons, for
example:

• l To ensure adequate provision for your spouse.

• To provide for your children and to clarify the terms on which money or assets should be held for young children.

• To appoint someone to care for your children after your death.

• To provide for other relatives or someone outside your immediate family (e.g. a partner/friend or a charity).

• To minimise administration costs.

• To minimise inheritance tax liabilities.

• To prevent added stress and worry to your family after your death.

• To ensure that your estate will be administered by someone you can trust.

• To specify your funeral directions.

Can my Will be altered?

During your lifetime you can easily change your Will by making a new one or by adding a codicil to an existing Will.

Inheritance Tax Planning

Inheritance Tax (or IHT) is the tax payable on a person¹s net assets at the date of death. It will only become due if the net value exceeds the Nil Rate Band at the time of death. This is currently £275,000* and any assets exceeding this figure will be chargeable to IHT at 40%.

If you are married, you may leave all your assets in your Will to your surviving spouse on your death. On the death of the first spouse there will no tax payable, whatever the value of the estate, because of a spousal exemption. However, this will mean that the first to die will lose the benefit of their Nil Rate Band and hence more IHT will become payable on the second death.

You may reduce your IHT liability by either giving away the Nil Rate Band to your children or by passing the Nil Rate Band into a Discretionary Trust on the first death. On present figures, this could lead to a saving of £110,000 in IHT (i.e. £275,000 x 40%). It may also be possible to save some IHT payable on an estate by executing a Deed of Variation if this is done within two years of the date of death.

(*This was the rule at the time of going to press. But the Chancellor can choose to change this in the Budget).

Enduring Powers of Attorney

The Law Society recommends that when you complete a Will, you should also consider executing an Enduring Power of Attorney whereby you appoint a
person(s) of your choice to deal with your affairs if you become unable to do so at some time in the future. A period of incapacity can strike when we least expect it and this document would enable your appointed Attorney to look after your affairs to cover a period of illness, hospitalisation, whilst you are abroad, or on a more permanent basis. An Enduring Power will also continue if you were to lose your mental capacity and so make matters far easier for your family to handle. It is an inexpensive procedure, which we are able to advise upon. We can also help when it becomes necessary to register an Enduring Power of Attorney with the Court of Protection once someone has lost their mental capacity.

This would avoid the need of applying to the Court of Protection for a Receiver to be appointed in the event of a loss of mental capacity, which is a costly and lengthy process.

Receivership Application

In cases where a person is Œmentally incapable¹ but holds no Enduring Power of Attorney, we can assist in applications to the Court of Protection to appoint you as a Receiver, to enable you to look after that person¹s affairs.

Probate

You may be a Personal Representative having responsibility for administering the estate of a deceased person. This will either be as an Executor (someone named in a Will) or a family member eligible to be appointed as an Administrator in the case of an Intestacy (where there is no Will).

You will be responsible for carrying out the wishes of the deceased in the Will or acting in the Intestacy and will have to find out the values, at the date of death, of all the assets and liabilities of the estate.

If the value of an estate is very small, the Personal Representative may be able to sell or encash the assets directly with the institutions concerned. However, in most cases you will have to apply for a Grant of Probate (or Grant of Letters of Administration in the event of an Intestacy) which is the document issued by the Probate Registry giving you the authority to act. This is always needed if there is a house to sell. The Grant will enable you to pay any debts, call in the assets, pay any tax due and distribute the net estate to the beneficiaries.