Publications

Wills and probate - The Facts

Although not at the forefront of everyone's mind, making a Will is the only way to ensure that those whom you wish to benefit from your estate in the event of your death do so.

If you do not leave a Will then the Intestacy Rules will apply, these are the rules which decide how your estate will be divided in the absence of any instructions from you. In such circumstances your estate will pass on to your relatives, regardless of how close you are without a Will.

If you already have a Will you should be aware that due to either changes in legislation or your own circumstances you should arrange to have it reviewed at least every three years.

Below is a brief summary of things you should know when making a Will.

The Executor

This is the individual(s) who carries out the terms of your Will after your death and is responsible for administering your estate. The executor will apply for Probate, which involves collecting all your assets, distributing them to the beneficiaries of your Will as well as paying any of your debts.

Beneficiaries include those who (1) receive an outright gift of money, (2) receive as a gift an object owned by you, (3) receive the remainder of your estate, and finally (4) those that are under a Trust in your Will.

Probate

When someone dies an application is made to the Probate Registry. When you make a Will the peoples you have appointed as Executors will obtain Probate on behalf of your estate. Probate is important because unless the estate is very small (usually less than £5,000) the Executor of your Will needs to show a Grant of Probate to various institutions e.g. financial, in order for them to be sure that this person is entitled to deal with your assets and affairs.

Involved in the Probate and the responsibility of the Executor is:

Obtaining full details of the value of your assets as at the date of death
Paying any inheritance tax
Calculating and settling debts of the estate
Identifying all those include in your Will who are entitled to a share of the estate.

Inheritance Tax Issues

The nil rate band is currently £312,000. This is the maximum value of your estate on which no inheritance tax is payable, if you estate is worth a higher value you will be liable to pay inheritance tax. Married couples or civil partners are exempt from paying inheritance tax on assets which pass between them.

A recent extra benefit to married couples and civil partners is that the nil rate band can be transferred from one spouse or partner to another on the death of the second spouse or partner. This means that after both you and your spouse or partner die, up to £624,000.00 could be tax free.

Lasting Powers of Attorney

You may also want to appoint someone whom you trust to look after your affairs in the event where you no longer have the mental faculties to make sound choices. This person you have appointed will make decisions, acting on your behalf and in your best interests. The two types of Lasting Powers of Attorney are Personal Wealth and Property & Affairs.

A living Will

This is a document which usually outlines those treatments you do not wish to receive in the vent of certain illnesses or accidents. You should register your Living Will with your normal doctor to ensure that it is enforceable.

Author: Marsha Mclean-Anderson

Publication: Angel and Northwest Magazines

Date: October 2009