Wills, Trusts and Probates

Making a Will

Some people are reluctant to make a Will, either because they do not like contemplating their own death or because they think it is something that they can put off until they are older. It is advisable for everyone to make a Will to avoid creating additional problems for our families when we die.

If you get married or enter into a Civil Partnership

You should normally make a new Will when you marry or remarry. Wills made before your marriage will be revoked and will no longer be valid unless the Will states that it is made in contemplation of that marriage. As with marriage, entering into a Civil Partnership automatically revokes a Will and a new Will would have to be made or a Codicil signed.

If you are living with someone

The Intestacy Rule makes no provision for the survivor of an unmarried couple and therefore, a Will is needed to provide for your partner.

If you have children

Making a Will enables you to avoid restrictive statutory trusts for children who may need greater provision than their brothers or sisters. Additionally, appointing a Guardian for orphaned children under 18 years can be done through a Will.

If you get divorced

A new Will should be made when contemplating divorce. When a Decree Absolute of Divorce is made by the Court the former husband or wife loses all rights on an Intestacy and also any right to benefit under any existing Will.

If you retire

A Will can ensure you avoid care home fees or crippling inheritance tax.

Leaving money to charity or friends

This can be done by making provisions for them in your Will.

Once you have made a Will

It is important to keep it under review at least every 5 years. Circumstances and the law, can change and impact on your Will. A Will should also be reviewed when any major changes in the family or in finance occur.

Will I have to pay tax when I die?

It may be possible to arrange your affairs and prepare your Will so as to reduce the amount of tax payable when you die and thereby make greater provision for your family. The introduction of the transferable nil rate band has brought a significant benefit to spouses and civil partners. We can advise you whether this benefit is available to you. Despite the introduction of the transferable nil rate band the use of nil rate band trusts may still be useful in certain circumstances. Possible reasons include where the surviving spouse already has an additional nil rate band available (i.e. for remarried spouses, following the death of a spouse), for asset protection purposes (e.g. in the event of financial or marriage failure); where it is likely that the survivor may remarry; or if the value of an asset is likely to increase faster than increases in the nil rate band, or if the asset qualifies for business or agricultural property relief.

If you are faced with paying care home fees?

It is against the law to transfer ownership of an asset to another person specifically to avoid paying your care home fees. There is no time limit as to how far back the council can go to find out if you have given away assets to avoid paying care costs. However, you can plan for the likelihood of this event and protect half the value of the matrimonial home by making appropriately drawn Wills. The first partner to die can put their share of the property into trust in such a way that the survivor can continue living in the property. The trust would usually allow a new property to be purchased at any time and for capital to be released to the survivor should it be needed. Regardless of this flexibility, because the survivor does not legally own the capital, the trustees do, the half of the property in trust cannot be touched by the Local Authority.

Estate Planning and Pilot Trusts

Another form of estate planning is to create pilot trusts. Pilot trusts are lifetime trusts set up to receive property on the death via a specific legacy in a Will. They are usually discretionary and are suitable for many people including unmarried couples as they do not have the benefit of the transferable nil rate band and situations where you have a substantial estate whereby you create several pilot trusts which gives the opportunity of using at least one extra nil rate band and under current rules would allow an extra nil rate band for each trust. This will significantly reduce the IHT liability.

Making a Will when incapacitated

If someone does not have testamentary capacity, then a will needs to be constructed for them. This is commonly known as a ‘statutory will’. A statutory will can only be made by the authority of the Court of Protection and we can advise you on the process.

What is an Executor of a Will and what do they do?

If you are an Executor of a Will (or an administrator, if the deceased died without a Will (intestate)), then it is your duty to identify the assets (money, property, etc.) and liabilities (any outstanding debt owed) of the estate and distribute them to the beneficiaries. A grant of probate allows an Executor to gain access to the assets of an estate in order to carry out the wishes of the deceased. Normally, you need a grant of probate if the value of the deceased’s estate (after paying the funeral account) is over £5,000. These days, banks and building societies impose their own discretionary limit when they need a grant of probate in order to close the deceased’s account and release the funds to a beneficiary. If the deceased owned a property, either solely or jointly as tenants in common with another individual, then they will usually need a grant of probate in order to either sell the property or transfer it to the beneficiaries.

Contact

Henry Anstey

Further information - click to download

Why should I make a Will? (264.0 KiB)