Wills FAQ’s
Q. What is a Will?
A Will is a legal document in which you state what you would like to happen to your estate. Your estate consists of your house (less any outstanding mortgage or other loans secured on it), cash and savings, your car, household and personal effects, proceeds from any life assurance policies etc LESS any liabilities you have i.e. outstanding loans, credit card balances, household bills, funeral expenses, etc.
Q. What happens if I don't make a Will?
Should you die without a Will or if your Will is deemed to be invalid (e.g. if it wasn't completed or signed correctly) then you are said to have died intestate.
70% of the adult UK population die without a Will. This causes delays, stress, and financial hardship – but most worrying of all this results in the Courts deciding who gets what of your estate.
Q. When should I make a Will?
You can make a Will from the age of 18, but making a Will is especially important if you are anticipating marriage or a civil partnership, having a child, getting divorced or remarried, buying a property.
Every five years you should review your Will. Changes that should trigger a review of your Will include any changes in your financial, marital or emotional circumstances. Your family and friendships can change and your Will ought to reflect these changes.
Q. What is included in my estate?
Your estate is everything you own at the time of your death (that is in your sole name) after all your outstanding liabilities have been settled, including probate costs, inheritance tax (if applicable) and funeral expenses.
Your estate doesn't include money in a joint account or property or shares owned jointly. Also not included, life insurance policies in joint names and those where you have already nominated who the beneficiary should be on your death.
From your employment, your death in service benefit and pension is also not normally included as these are held in trust for whomever you may have already nominated.
Q. What is an executor?
An important part of your Will is the naming of who you would like to act as your executor. The executor is the person who will administer your Will after your death. They can be any trustworthy person you choose the most common executors are Spouses, Children over 18, Close Friend etc.
The responsibilities of an executor include:
1. Finding out what assets, property and investments the deceased had.
2. Having any valuables and property professionally valued.
3. Listing them and their current value.
4. Making sure the funeral takes place and arranging payment.
5. Establishing all liabilities.
6. Establishing pension entitlements.
7. Dealing with Tax liabilities.
8. Completing and submitting all Probate Registry forms.
9. Calling in assets.
10. Paying off debts.
11. Transferring gifts to beneficiaries.
12. Drawing up clear accounts to present to the main beneficiaries.
Q. What are Trustees?
Trustees are people you appoint in your Will to look after your property until for example, a child is old enough to inherit or where there is a life interest. Executors and Trustees are usually the same people.
Q. What happens to property in joint names?
People who are "co-owners" of property hold it either as "joint-tenants" or "tenants-in-common".
Husbands and wives are usually, but not always, joint-tenants. This means that when one of them dies the other one automatically becomes the owner of the whole of the property. It also means that a joint-tenant cannot make a gift in a Will of his or her share of the property.
Partners who have been married before often prefer to own the property as tenants-in-common. This means that when one of them dies his or her interest in the property forms part of his or her Estate. This then means that they can separately make a gift in their Will of their share of the property, perhaps to their own children from a previous marriage.
Q. What happens if I leave someone out of my Will?
If you have not properly provided for any of your dependants who are unable to maintain themselves, or if you have not been fair to your wife or husband (or even an ex-wife or ex-husband who has not remarried), the Court can alter your Will. Your reasons for not having provided for someone should be stated in your Will. The Court will consider these reasons but they will not automatically bind them.
Inheritance tax
Current UK legislation (as of April 2006) allows for the first £285,000 of your estate to be passed on free from Inheritance Tax. Under current legislation, the taxman will take 40% of everything you pass on over the £285,000 limit.
How much Inheritance Tax could you pay?
Estate Value |
Tax Payable (at 40%) |
£285,000 or less |
£0 |
£300,000 |
£6,000 |
£400,000 |
£46,000 |
£500,000 |
£86,000 |
£600,000 |
£126,000 |
£700,000 |
£166,000 |
£800,000 |
£206,000 |
£900,000 |
£246,000 |
£1,000,000 |
£286,000 |
Warning
With the current UK housing market you may be surprised just how much Tax your estate will be liable for.
Q. How can I avoid the council selling my home if I'm taken into care?
If a person is taken in to care then, under the Community Care Act 1990, the local council have the right by law to seize their home, put it up for sale and use the proceeds to support their long-term care costs. Obviously, if this happened then it might mean that when they eventually die there could be very little of their estate left for their surviving family.
Q. How can you avoid this happening?
It is illegal to deliberately transfer your own property to relatives or trusts if your prime motive is to avoid paying long-term care costs. However, it is not illegal for you and your partner to each make a provision in a Will, that upon the first death, the deceased's half-share of the family assets and/or home, is placed in trust for their children or other beneficiaries, instead of passing direct to the surviving partner.
The Protective Property TrustWill has been specially designed for this purpose. It keeps the assets and/or share of the home owned by the deceased partner away from the council's reach while at the same time allowing the surviving partner to continue benefiting from the assets and/or share of the home within the trust. On their death the assets and/or share of the home owned by the trust together with whatever is left of the assets of the second partner can be given to the surviving family. |
