WHY IT IS IMPORTANT TO MAKE A WILL?

1. PEACE OF MIND - You can make sure that your wishes are carried out after your death. For example, you can say how your funeral should be dealt with and you can specify to whom you want to leave your personal possessions, your money and any other assets which you may have.

2. PROTECTING YOUR CHILDREN - If you have children under 18 it may be important to make provision for them in the event of your death particularly if you are a one parent family or unmarried parents living together. In such case a valid Will nominating guardians is invaluable.

3. FINANCIAL ADVANTAGES - It will make the administration of your estate easier and reduce the legal fees. You can also make sure that the minimum amount of tax is payable.

4. APPOINTMENT OF EXECUTORS – By appointing named persons to deal with the administration of your estate, you are likely to ensure that your estate is dealt with in a proper manner. For further information regarding the role of executors see below

WHAT HAPPENS IF I DO NOT MAKE A WILL?

1. If you die without making a Will (called “dying intestate”) it can be complicated to work out who will get what. Your estate will be divided in accordance with “Statutory Rules” and although your next of kin will receive some of your estate, they will not necessarily receive all of it.

2. Many people think that if they are married and do not make a Will that everything would automatically go to their husband or wife. In fact, this is only the case if your estate is under a certain value. For example if you were married or in a civil partnership with children the survivor would receive:

* The personal chattels
* The first £250,000.00 (from 1st February 2009)
* A life interest (for example, the income or the interest of the monies invested, but not the money itself) in half of what is left.

If there are no children the survivor would receive:

* The personal chattels
* The first £450,000.00 from 1st February 2009
* Half of what is left

3. If you are living as a couple but are not married and are not civil partners then you may be treated as a single person and your surviving partner may receive nothing.

4. If you have no immediate family it is possible that your estate may simply pass to the Government and you would have no say in where your hard earned money or possessions will go.

5. Because no executors have been appointed to deal with the administration of your estate, the Statutory Rules specify who deals with the estate as well as who benefits from it. The person who will deal with (administer) the estate is the closest living relative to the deceased. If several people have an equal right to deal with the estate (for example brothers and sisters) Letters of Administration will normally be given to the first of these people who applies for it. This can often cause a problem when the deceased had several brothers or sisters who all want to be in charge of the funeral or the administration. If they cannot agree about this themselves they must apply to the Probate Court which will decide who will take responsibility. This process is complicated and can be expensive.

WHEN SHOULD I MAKE A WILL?

If you have not already made a Will the best time to do it is NOW. If you have made a Will then we recommend it is reviewed every 3 or 4 years or if your financial/family circumstances change.

APPOINTMENT OF EXECUTORS

When you make a Will you need to decide who you want to appoint to be an executor. This can often be more than one person. The executors are the people who are appointed to deal with the estate of the person who has died and to make sure that your wishes are carried out. Executors can also be beneficiaries of the Will and their duties will usually include

* Arranging the funeral
* Taking charge of the house and possessions of the person who has died.
* Applying for Probate – see below.
* If there is Inheritance Tax to pay reporting the value of the estate to the Capital Taxes Office.
* Appointing a solicitor to deal with some or all of the above.

Failure to correctly carry out the legal duties and procedures required can lead to an executor being personally liable to the estate. An executor can relieve himself/herself from personal liability by instructing a solicitor to formally handle the deceased’s affairs. Alternatively individual solicitors or partners in a firm of solicitors can be appointed to act as executors.

WHAT IS PROBATE?

Probate is an official legal document that gives the executors of the Will the right to deal with the assets and property of the deceased. You will need to apply for Probate if the person who died had:

* A bank, building society or National Savings account with more than £5,000.00 in it
* Stocks or shares.
* Property or land.
* Life or term insurance policies that are paid to the estate (rather than to the beneficiaries of the policy).

DO WE ALWAYS NEED PROBATE?

In some cases you do not need to apply for Probate, this is when:

* The person who has died left very little (say, belongings and money amounting to less than £5,000.00).
* Everything they owned was in joint names with someone to whom their share passes automatically (husband, wife or civil partner) or
* There are no bank, building society or National Savings accounts with more than £5,000.00 in the account.

WILL I HAVE TO PAY ANY INHERITANCE TAX?

Whether or not you as the executor have to pay Inheritance Tax out of the estate depends on:

* How much the property and belongings of the deceased were worth when they died.
* The value of any trust from which the deceased may have benefited.
* The value of certain gifts the deceased made in 7 years before they died (or longer if they “reserved an interest”).

If all of the above add up to a certain amount (called the “nil rate band”) the estate has to pay Inheritance Tax of 40% on the sum of money above this amount. The amount is reviewed every year and as at April 2010 it was £350,000.00.

Since 2007 if your husband, wife or civil partner died, you can carry forward any unused portion of their nil rate band and add it to your own nil rate band. This usually means that for most married couples or civil partners the first £700,000.00 of their combined estate is exempt when the last one dies.

There is no Inheritance Tax payable on assets left by married couples or civil partners to each other regardless of value. In such cases Inheritance Tax only becomes payable on the death of the survivor in respect of assets that exceed the “nil rate band”.