Wills – Frequently Asked Questions
Having a Will means that you decide what happens to your belongings after you die. If you don’t have one, the law will decide who inherits; and your belongings may not be shared out as you’d like. Having a Will also helps prevent arguments between family and friends over who gets what.
If you haven’t made a Will, or it can’t be found, you are said to have died ‘intestate’ and the Rules on Intestacy dictate how your estate will be divided. For example, if you’re not married, your estate would go straight to your children. If you have no children, the estate would go to your parents. If they had already died, it would go to your brothers and sisters.
Even if you’re married, if you have children, your spouse will still only be entitled to your personal possessions, the first £250,000 of your assets plus half of the remaining estate. Depending on property prices, this could mean your family home has to be sold, if it isn’t already jointly owned.
If you don’t have a partner, children or relatives and die without a Will, the estate goes to the Crown. If you have no relatives, you may wish to leave your possessions to friends or to charity.
You can choose who you include or exclude from your Will, but the law needs to know that it was a conscious decision to exclude any children.
If you intend to exclude anyone who would expect to be included in your Will, such as a spouse, partner or children (and, in some cases, other financially dependent relatives), you should inform us and leave a letter with your Will stating your intentions or they may be entitled to make a claim on your estate.
In the most common situation, if you own a house jointly with someone, ownership will pass to the other person, regardless of what you say in your Will. However, the value of your share may count when calculating Inheritance Tax. It is possible to “split” ownership during your lifetime so that your share would be passed on according to your Will, but, as there are so many other factors to consider, you need to take advice before doing so.
The law of the country where the property is located may dictate who you can leave the property to. We would advise you to make a Will in that country and leave the property out of your UK Will. However, Inheritance Tax may still be payable on this property even though it is abroad. If you’re in this situation, we can offer advice on tax planning to help reduce the amount of your estate that will be chargeable to Inheritance tax.
If the value of your estate, including your house, amounts to over £325,000, then Inheritance Tax may be payable, depending on who you leave your estate to. It’s worth seeking advice on tax planning to reduce the amount payable.
Any gifts set out in your existing Will to your former spouse will be cancelled by the divorce, and they will no longer be an executor. The rest of the Will still stands, although we’d advise you to appoint another executor. Remember, if your former spouse has not re-married, they may be entitled to make a claim against your estate, unless they have been excluded from doing so as part of the divorce agreement.
When you remarried, your old Will would have immediately been cancelled, so you need to make a new one. Your first wife may be able to make a claim on the estate if she has not remarried, unless she was specifically excluded from doing so as part of the divorce agreement.
A Will must be signed by the Testator (i.e. the person making the Will) in the presence of two witnesses over the age of 18. The witnesses must not benefit themselves under the Will nor be married to anyone who will benefit. They don’t need to read the Will, they simply need to know it is your Will and they are witnessing your signature and identity.
It should be kept in a safe place, such as our safe storage facilities, where we offer to keep it free of charge. Most importantly, you must tell your executors where it is. If the Will cannot be found, the law will assume that you have died intestate.
If a husband and wife, or both partners, were to die within a short period of each other, the assets of the first to die would have to be transferred twice, which can make the probate process more complicated. Specifying the 28 day period simplifies the process and allows each Will to follow the testator’s wishes for the specific circumstances.
From April 2017 an additional inheritance tax allowance, the Residential Nil Rate band (RNRB) will be introduced. Starting at £100,000 and increasing to £175,000 by 2020/21 the RNRB will be in additional to the Nil Rate Band (currently £325,000) and the Transferable Nil Rate Band (the ability to transfer the Nil Rate Band between spouses/civil partners).
The RNRB will be available to people who die after 6th April 2017, leaving their main (qualifying) residence to “lineal descendants” whether by Will, intestacy or survivorship. If the property passes to a trust rather than by way of an outright gift, then the RNRB will only apply in certain circumstances, depending on the beneficiaries and nature of the trust.
The RNRB will be transferable between spouses and civil partners but will be tapered if the estate of the deceased exceeds the taper threshold, initially being £2 million.
Why do I need to think about this now?
It’s always a good idea to keep your Will under review anyway, but the forthcoming introduction of the RNRB is a good reason to get your Wills out and discuss them with us.
Whilst many Wills will already comply with the rules relating to the new allowance, there are many common situations where they will not. For example, if your Will leaves your entire estate to your children, there should be no problem with your estate claiming the RNRB, provided the other conditions are met.
If, however, your Will leaves your estate to your grandchildren either directly, or in the event that your child has predeceased, then the availability of the allowance may be lost if the gift to the grandchild has conditions attached, such as them having to reach a certain age before they become entitled.
This is quite a common way to draft gifts to grandchildren, and it is therefore a good idea to review your Wills and take advice on any possible changes that you can make now to preserve the availability of the new allowance.