Wills

A will is a document which takes effect on death and in which you decide who can benefit from your Estate. Your Estate being everything that you own on death.

Many people think making a Will isn’t necessary or relevant to them personally.

If you die without having made a Will the effects on your Estate and loved ones may be far from what you envisaged would happen. The Intestacy Rules  will decide who can benefit from your Estate if you die without having made a valid Will. The strict application of these rules can leave many loved ones disappointed. Step children, close friends and partners who are not married or in a civil partnership will not benefit under these rules.

Anyone who is over 18 years of age and has full mental capacity can make a Will.

In some circumstances it may be possible to draft a Will for someone who does not possess the requisite mental capacity, this is known as a statutory Will and is made via the Court of Protection.

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When making a Will you must ensure it is drafted correctly and conforms to the legal requirements otherwise it will fail and your Beneficiaries will lose out.
Below are just some of the important aspects to consider when making a Will:

  • Marriage and the affects on your existing Will and Estate
  • Divorce and the affects it can have on your existing Will and Estate
  • Disinheriting someone and the affects it can have on your Will and estate
  • Complex family circumstances and providing for them within your Will
  • Children under 18
  • Providing for a vulnerable and/or disabled Beneficiary
  • Considerations of long term care arrangements
  • The blended family – second marriages, children from previous marriages and step children
  • Family disputes
  • Tax
  • Expected windfalls in the future
  • Any gifts made within your lifetime

For more information please contact us or if you need help with any of the issues, even if it’s just to talk things through, then please don’t hesitate to contact us either by email, telephone or personal attendance. Where attending an office is difficult one of our team is more than happy to visit you at home.


Basic Wills

By choosing to make a Will you can specifically provide for your loved ones. If you die without having made a valid Will then the current law will operate a set of rules, known as the Intestacy Rules, to decide who will benefit from your estate.

In a Will you can choose your executor who will be the person responsible for identifying, collecting and distributing your estate in accordance with your Will provisions, and you can choose your beneficiaries, those who will inherit your estate.

Within a Will you can provide for your estate to pass as a whole to your beneficiaries, this is usually termed as the residue, or you can make gifts of certain items or sums, these are known as legacies.

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You can make gifts conditional in other words on the happening of certain events for example I give £100 to X if he is married at the date of my death.

You can also make a gift for someone to enjoy for their lifetime only and thereafter provide for it to pass to another, for example I permit x to live in my house and use it as his principal private dwelling throughout his life and thereafter the house shall pass to Y

You can also appoint a guardian for infant children in the event that you should die and your children are left without a surviving parent. A guardian will be charged with the care and welfare of the infant children.

Wills may just provide for the basic provisions and take a simple format however they may also provide for the more complicated circumstances. Whatever form your Will takes it must be drafted correctly for it to be valid. There are strict rules as to how a Will should be drawn and if these are not followed correctly your Will could fail and your proposed beneficiaries will lose out.

Life’s events can and will affect your estate and this in turn will affect how your Will is drafted. A Will should always be drafted in context with your personal circumstances.

See the list below for points to consider when making your Will:-

  • Marriage and the affects on your existing Will and Estate
  • Divorce and the affects it can have on your existing Will and Estate
  • Disinheriting someone and the affects it can have on your Will and Estate
  • Complex family circumstances and providing for them within your Will
  • Children under 18
  • Providing for a vulnerable and/or disabled Beneficiary
  • Considerations of long term care arrangements
  • The blended family – second marriages, children from previous marriages and step children
  • Family disputes
  • Tax
  • Expected windfalls in the future
  • Any gifts made within your lifetime



Wills That Provide For The Vulnerable or Disabled

Sometimes a Will may require more than basic drafting as it needs to provide for more complex circumstances.

You may need to ensure that your Estate provides for someone who is unable to manage his or her own affairs. Within the Will you can make detailed provision as to how your assets are distributed to a particular Beneficiary, you may not want to or it may be unwise to give an inheritance sum directly into the hands of a Beneficiary or in a lump sum. You may wish instead to distribute the inheritance sum over a set period of time or have your Trustees oversee how it is distributed and managed for that particular Beneficiary. Using a Trust within your Will can help you to provide for such circumstances. There are different types of Trusts and these can be created for many different purposes.



Statutory Wills

If you lack the mental capacity to make a Will then it may be possible for the Court of Protection to make a Will on your behalf.

Not all applications to the Court require you to attend a hearing and the Court can make a Will if it sees fit on the paper application alone.

On an application for a Statutory Will you must show that the proposed Will provisions are necessary in order for the Court to justify departing from the existing circumstances.

When making the Statutory Will the Court will consider the past and present wishes and feelings of the person for whom the Will is being made, including

  • Any written statement they may have made
  • Their beliefs and values which may influence their decisions if they had had capacity

The Court will always act in the best interests of the person for whom they make the Will.



Advance Directions or Living Wills

These terms are inter-changeable. An Advance Direction or Living Will is a document in which you can set out your wishes for your future care and medical treatment should you need it in the future and you lack the mental capacity at that time to enable you to give your own directions. The document is legally binding. It can be used to refuse life sustaining treatment but they cannot be used to request treatment to terminate life. The documents work very similarly with Health & Welfare Lasting Powers of Attorney. The two documents can co-exist but should be drafted carefully so as to ensure they don’t conflict with each other.

Advance Directions or Living Wills are usually more specific in their provisions whereas Health & Welfare Lasting Powers of Attorney are more general in their power, giving the Attorney the decision making powers.



Wills and Care Home Issues

You may wish to consider how you can make provision within your will to protect your assets from being used to fund future care home fees.

Preserving assets for future generations is a concern for most people. There are ways in which you can help to minimise the effects of long term care costs on your Estate within your Will.

The uses of Trusts both in a Will and made in life (inter vivos) can be greatly effective for protecting assets from funding long term care whilst still enabling you or your loved ones to benefit from the assets.

Again, when planning for your future you should ensure that the advice you receive and the action you take is done in context of your personal circumstances. Advice and action that is good for one may not be good for another.

For more information please contact us or if you need help with any of the issues, even if it’s just to talk things through, then please don’t hesitate to contact us either by email, telephone or personal attendance. Where attending an office is difficult one of our team is more than happy to visit you at home.




Varying a Will And Redirecting Your Inheritance

It is possible for you as a beneficiary of a deceased’s estate to redirect your inheritance share by either altering the terms of the deceased’s Will or where the deceased died without a Will, by writing a posthumous or notional Will for the deceased.

You can redirect by making a Deed of Variation. The variation is only effective for that part of the deceased’s estate which is due to you and it must be made within two years of the Deceased’s date of death. These changes are effective for tax purposes.

Varying a minor’s share will not be effective without the consent of the Court.

Inheritance Tax

Planning ahead will give you the opportunity to make maximum use of the tax reliefs and exemptions that may be available to you for any Inheritance Tax liability you might have.

Inheritance Tax is charged on the net value of the assets passing from one person to another on death. This net value can sometimes include gifts which the Deceased person made in life. .

Every individual has an allowance for Inheritance Tax purposes which is known as the ‘nil rate band’, this is currently fixed at £325,000. .

Any gift to a spouse, civil partner or charity is exempt from Inheritance Tax. .

Where someone dies leaving their entire Estate to their surviving spouse/civil partner then the survivor in effect also inherits the Deceased’s unused nil rate band. The result is that when the surviving spouse/civil partner dies their Estate benefits from a double nil rate band and therefore on current figures that would be a £650,000 allowance. .

The following are some of the ways in which you can act to reduce your inheritance tax liability or its effects upon your estate: .

Making gifts

Small gifts may not be taken into account when calculating the Inheritance Tax liability on death. Currently gifts of £3000 and under can be made and these will fall within the annual exemption. Regular gifts out of income and other one off gifts for family marriages may also be made free of the Inheritance Tax radar. .

Any gifts which you make more than seven years before you die will be exempt from Inheritance Tax. .

There are some gifts however which will not be discounted for Inheritance Tax. If you retain a benefit from a gifted asset then that asset will be included in your Estate for Inheritance Tax purposes. The simplest example of this is when you make a gift of the family home but remain in occupation of it, the value of the family home will remain inside your Estate when assessing the Inheritance Tax position on your death.

If you gift your house and continue to live in it, your Estate or the person you gave your house to might still have to pay Inheritance Tax on its value when you die. .

Reducing your Inheritance Tax bill by giving to charity

From 6 April 2012 if you leave 10 per cent or more of your net Estate to a qualifying charity your Estate may qualify to pay Inheritance Tax at a reduced rate of 36 per cent. .

There are different ways that you can own assets such as money, land or buildings and the way that you own the assets and with who affects the way they’re treated when deciding whether the reduced rate of tax can apply. .

Inheritance Tax reliefs

There are certain types of property that qualify for a full relief from Inheritance Tax or a discounted value for Inheritance Tax purposes. .

The following assets may attract the relief or discounted value: .

  • business assets – such as shares in a business partnership, family company shares, land, buildings and machinery
  • agricultural property – such as land, working farmhouses, farm workers’ cottages and barns
  • woodland timber
  • National Heritage property – or famous and important works of art (but only in very rare cases)

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