WILLS AND PROBATE

If you have not made a Will before, there are numerous factors you need to consider before you will be ready to start.  The first thing to do before you begin writing your Will is to find out if you meet the requirements on our page

 

Who can make a Will?

 

On this page:

What are your assets?

Who will you appoint as your Executor?

Do you need to appoint Guardians?

Inheritance Tax issues

Do you want to create a Trust?

How will you distribute your assets?

Personal circumstances

 

What are your assets?

 

You should start by making a list of all your assets such as cash, investments, vehicles and any other personal possessions of value.

 

Who will you appoint as your Executor?

 

An executor is someone you have named in your Will as the person you would like to be responsible for handling your affairs after your death. 

 

Being an executor involves a considerable amount of work, and includes the following responsibilities:

•Dealing with all the paperwork related to your estate.

•Gathering all the assets of your estate.

•Ensuring that all your debts, bills and taxes are paid out of the money in your estate.

•Distributing the remainder of your estate (after payment of debts, bills and taxes) in accordance with your Will.

•Holding assets or money 'in trust' for a beneficiary, if this is a requirement of your Will, e.g. if the beneficiary is under 18 at the time of your death.

 

It is important to choose your executor(s) with care, as these responsibilities can be difficult for someone who is unaccustomed to dealing with official and financial matters.  In certain circumstances, an executor who makes an error in carrying out these responsibilities can be held personally liable for any loss suffered by another person as a result.

 

It is also advisable to speak to the person you are considering appointing as an executor before writing your Will, to ensure that they are willing to undertake this responsibility.

 

When choosing an executor, bear in mind the following considerations:

 

•Two executors are better than one, as this provides 'back-up' if your appointed executor passes away or is otherwise incapacitated at the time of your death.  You may appoint up to four executors.

•Your executor should be a responsible person who is willing and able to handle the legal, financial and administrative tasks involved in dealing with your estate.

•Ideally, one of your executors should be younger than you, so that there is a reasonable chance that they will out-live you.

•If you are married or in a civil partnership, your spouse or partner would ordinarily be one of your executors.

•If your children are over 18, they can be appointed joint executors.

•If one or more of your children is under 18, it is advisable to appoint a professional such as a solicitor or accountant as one of the executors, as it will be necessary to establish a 'trust' in which property is held until the child reaches 18.  For more on this, see 'Do you want to create a Trust?' below.

 

If you wish to appoint a Guardian for your young children, you may consider appointing this person as one of your executors also.  For more on this, see 'Do you need to appoint Guardians?' below.

 

Do you need to Appoint Guardians?

 

A Guardian is someone you have named in your Will as the person you would like to be responsible for your children if they are orphaned before reaching the age of 18. 

 

If you fail to appoint Guardians in your Will and both parents die before the children reach 18, the courts will appoint Guardians instead, but they won't necessarily appoint the people that you would have preferred to take care of your children.

 

If when you pass away the other parent of your child survives, the surviving parent will normally continue to have full responsibility for the child.  However, if neither parent survives (as in some road accidents) then the Guardians you have appointed will take on the responsibility for your children.

 

Being a Guardian means taking on a significant duty of care for your surviving children.  The role of Guardian can also involve considerable expense, and you should consider making arrangements for this in drawing up your Will, particularly in relation to setting out Trusts and appointing Trustees.  For more information on this, see Do you want to create a Trust?

 

Being a Guardian involves the following responsibilities:

•Day-to-day care of the surviving children.

•Making decisions about the children's upbringing, education, health and welfare.

•Usually a Guardian will also be one of the Trustees for the property held in Trust for the child/children.

When considering who to appoint as Guardian for your children, you will need to consider the following:

•How do I feel about their values and parenting skills?

•Are they able to offer a stable family environment?

•What is the quality of their present relationship with my child/children?

•Are they willing and able to handle the responsibility of caring for my child/children on a long-term basis?

 

You may appoint just one Guardian, however, most people when writing their Will choose to appoint two, typically a couple.

 

If you appoint the Guardians as Trustees as well, it is advisable also to appoint another Trustee who is not related to the Guardians, e.g. a solicitor or accountant.  Doing so will help to provide objectivity and guard against conflicts of interest.  It will also provide the Guardians with some support in handling the financial and legal aspects of a Trust.

 

You may only appoint Guardians for children in your Will if you currently have 'parental responsibility' for the children.  To determine whether you have parental responsibility in the eyes of the law, follow one of the links below:

 

•For births registered in England and Wales 

•For births registered in Scotland  

•For births registered in Northern Ireland

 

Inheritance Tax Issues

 

Inheritance Tax is the tax payable on the value of the estate of someone who has died.  It is charged at a rate of 40% on the portion of the estate over the 'threshold level', currently £325,000 (2011-2012).

 

It is possible to minimise the amount of Inheritance Tax (IHT) that will be payable on your death, by becoming familiar with the rules of how IHT is calculated and organising your finances and your Will accordingly.

 

This website provides an overview of how Inheritance Tax works; having read this information you may wish to discuss the matter further with a solicitor or accountant.

 

Do you want to create a Trust?

 

A Trust is an arrangement set up by Will or Deed in which money, property or other assets are held and managed by the appointed Trustees on behalf of the named beneficiaries. 

 

A Trust is usually set up when a person writing a Will has children under the age of 18.  Doing so allows for your money, property and assets to be looked after properly until your surviving children are old enough in the eyes of the law to take responsibility for them.  When you set up a Trust in your Will, you must also appoint Trustees who will become responsible for managing the assets in accordance with your instructions as stated in your Will.

 

There are different types of trusts:

 

•Fixed Trusts, in which the proportions for how much to pay to each beneficiary are clearly stated.

•Discretionary Trusts, which state the names of the beneficiaries but allow Trustees to decide how much to give to each, according to circumstances.

•Accumulation and Maintenance Trusts, which are usually used to provide for children and grandchildren, and which attract enhanced tax rates.

•Protective Trusts, in which the beneficiary can receive income from the Trust while the capital remains protected.  This type of trust is usually used for beneficiaries who are bankrupt or likely to become so.

•Trusts for Disabled Beneficiaries, which are discretionary trusts with special tax exemptions for beneficiaries who are disabled.

For more on trusts, read Setting up Trusts.

 

How will you distribute your assets?

 

Your assets are everything you own, including houses, land, overseas property, cash, stocks and shares and other investments, jewellery, antiques, household contents and other personal possessions.

 

While you may leave your assets to anyone you wish, you should be aware that the Provision for Family and Dependants Act 1975 requires that, wherever possible, you should leave enough to your dependants for them to live on.  If you have dependants and write a Will that leaves everything to another beneficiary, your Will may be challenged in the courts, who may declare it invalid.

Here are some issues to consider when deciding how you wish to distribute your assets:

 

Who are your dependants?

•Your partner: as well as your spouse or civil partner you may need to consider any former spouse or civil partner who has not re-married, or any partner with whom you've been living for at least the last two years.

•Your children: as well as your natural children, you will also need to make arrangements for any adopted or step-children, or anyone that you have been caring for as if they were your child.

•Others: You may also need to make arrangements for anyone that you have been financially providing for, such as an elderly or infirm relative.

 

What do you want to leave them?

 

If you want to leave gifts of money to a beneficiary/beneficiaries, there are various ways to go about it.

 

•By giving a lump sum, also known as capital.  You can do this in a number of ways:

  1. By naming your intended beneficiary (e.g. your partner/child) as the beneficiary of your life insurance policy,
  2. By stating in your Will that you would like the beneficiary to receive the money in your savings accounts,
  3. By stating in your Will that you wish to leave the beneficiary a percentage of your estate.

•By arranging a regular income, also known as life interest.  You can do this in one of the following ways:

  1. By arranging for the beneficiary to receive income from your pension,
  2. By leaving the beneficiary an investment that pays out regular profits, e.g. bonds, investment funds,
  3. By leaving the beneficiary some assets in a Trust that pays them a regular income.  (For more on this, see Do you want to create a Trust?)

 

If you prefer, you may leave both a lump sum and a regular income.

 

Who else to you want to remember in your Will?

 

•There may be other (non-dependent) relatives and friends to whom you want to give some small gift.  This may be a sum of money or a specific object of monetary or sentimental value.

•Bear in mind that any cash gifts you leave to charity are not charged Inheritance Tax.  Make sure that your Will states the exact name, address and registered charity number of the charity to which you want to give.

 

Personal Circumstances

 

No two situations are the same, and expert professional advice is always a wise investment.

If any of the following circumstances applies to you, we strongly recommend that you consult a solicitor and/or an accountant when making your Will:

 

•The value of your estate is more than the Inheritance Tax threshold, currently £325,000 (2011-2012).

•You own property/land or other assets or business interests overseas.

•Your children are under the age of 18.

•You are estranged from one or more members of your immediate family.

•You are divorced or separated from your previous civil partner.

•You are divorced, separated or estranged from the mother/father of your children.

•You have children from more than one marriage.

•You have never been married to your children's mother/father.

•You are not sure whether you have parental responsibility.

•You are considering leaving someone out of your Will.

•You wish to set up a Trust for one or more of your beneficiaries.

Contact

Tel:   07711 005774

Fax: 0191 5006767

E-mail: tony@emhfp.co.uk

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