Wills Guide
Writing a last will and testament
Why you should write a last will and
testament
Writing a last will and testament is a seemingly complex and
daunting task that the majority of Britons avoid until it is too
late.
But by coming to terms with the fact that our time on this earth
is limited and setting aside a little time to plan and write a
will, you can help relieve many potential days of heartache and
headaches for loved-ones in the future.
The benefits
It is still widely believed by many married people that on their
death, all their assets will automatically pass to their spouse.
But in reality, depending on the size of the estate, if there are
children, a spouse may only inherit personal items and the first
£250,000 outright.
The remainder of the estate is split to one half on trust to pay
the income to the surviving spouse and the other half passes
absolutely to the children on attaining the age of 18 years. This
applies by law in England, Northern Ireland and Wales, different
provisions apply to Scotland.
If you co-habit as partners then, contrary to popular belief,
your partner would have no automatic right of inheritance, which
means that as more and more people choose to live together, the
making of a will is ever more important.
You also need to take into consideration who would care for your
children if both of you were to die - guardians need to be
appointed so you can be sure they will be cared for by people you
know and trust.
A will can set out your wishes in this respect precisely -
otherwise you are leaving it for the courts to make the
decision!
If you don't have a Will then you will NOT be able to do the
following:
- pass your estate to an unmarried partner
- decide how much money is left to each of your family
members
- specify who will become the guardians of your children
- leave something to a charity
- leave a memento, e.g. a piece of jewellery to a treasured
friend
- reduce any potential inheritance tax liability your estate may
have
- preserve your estate should you go into residential care
Saving on Inheritance
Tax
As the old saying goes, there are only two certainties in life -
death and taxes. Unfortunately there is a point where those two
come together and that is when your beneficiaries (other than your
spouse) are stung for Inheritance Tax. The threshold at which this
tax is payable is now £325,000 from April 2009 and is set at a
hefty 40%.
The threshold may seem high but remember your house alone may
fall into this category. An independent financial adviser (IFA) can
show you how to minimise your IHT before you draw up your will.
Intestacy
Intestacy means dying without leaving a legally valid will. If
this happens then people may inherit some of your estate without
your permission.
If you do not leave a will your money and possessions will be
distributed according to the intestacy rules laid down in the
Administration of Estates Act 1925. If you have no relatives the
Crown (the state, in effect) is entitled to take everything.
Planning your last
will and testament
Claims Financial