Making a Will
The Benefits of making a Will
If you die intestate (in other words, without a will) you run the risk of leaving behind a trail of stress, cost and family feuds. For example, once all of your liabilities have been accounted for, such as outstanding loans or overdrafts, your remaining assets will not automatically go to your current spouse if you are without a will.
If you have children, the ‘statutory legacy’ (the amount going to your legal spouse or legal civil partner), from February 1st 2009, entitles your spouse to the first £250,000 of assets, and 50% of the remainder - the rest could end up with your parents, brothers and sisters and other relatives.
If you have no children (from February 1st 2009, your spouse will get first £450,000 of assets, and 50% of the remainder - the rest could end up with your parents, brothers and sisters and other relatives.
If you intestate with no surviving spouse or legal civil partner your estate passes to the following, in order:
- Their children, subject to the property being placed in trust but if none, to
- Their parents, equally if both alive, but if none to
- Their brothers and sisters subject to the property being placed in trust but if none to
- Their half brothers and sisters subject to the property being placed in trust, but if none to
- Their grandparents equally if more than one, but if none to
- Their uncles and aunts subject to the property being placed in trust, but if none to
- Their half uncles and aunts subject to the property being placed in trust, but if none to
- The Crown
The worst-case scenario is if you die single with no children. In this instance, and in the absence of any other surviving relatives, your entire estate and possessions are likely to be passed to the Crown. Even if you only want your estate to go to a charity of your choosing it makes sense to make a will.
Tax
Sadly, two of life’s great certainties often arrive hand-in-hand and this is when your beneficiaries (other than your spouse) are stung for Inheritance Tax (IHT). The threshold at which this tax is payable changes year-on-year but it kicks in at £312,000 (tax year 2008/2009) and is set at 40%.
You may think IHT only applies to the wealthy but now it is not unlikely that your property alone – especially if it's in London or the South East – falls into this category. A good independent financial adviser (IFA) can show you how to minimise your IHT before you draw up your will.
“Thank you for all your good advice and help”
Mr A. P. Kent
