If someone dies without making a Will then the Intestacy Rules apply, which could make things complicated. Paul Howden, the Partner who heads the Wills and Probate department at Morley Brown Solicitors can help you safeguard your family’s future.
Why make a will?
It is now more important than ever that you make a Will. The reasons for this are if someone dies without a Will then the Intestacy Rules apply.
If you are married with children, your spouse is only entitled to everything up to £250,000 plus personal possessions. If you have assets worth more than £250,000, your spouse could lose their home and other substantial assets in the event of you dying intestate. In this event, surviving children or grandchildren are entitled to some of the estate.
If you are married with no children and have no Will, your spouse is entitled to everything up to £450,000 plus personal possessions and anything else has to be divided equally between your spouse and your parents. If your parents are already deceased, then their share would go to any brothers or sisters or their children.
Unmarried couples should remember that in the event of not having a Will that their partner does not automatically inherit anything.
To avoid these problems, you should consider making a will to give effect to your wishes and ensure that your estate is managed in the manner that you intend.
Since October 2007, you can transfer any unused Inheritance Tax threshold from a late spouse or civil partner to the second spouse or civil partner when they die. This can increase the Inheritance Tax threshold of the second partner – from £325,000 to as much as £650,000 in 2013-14, depending on the circumstances.
Everyone’s estate is exempt from Inheritance Tax up to a certain threshold: £325,000 in 2013-14. This threshold is also known as the ‘nil rate band’.
Married couples and registered civil partners are also allowed to pass assets to each other during their lifetime or when they die without having to pay Inheritance Tax. It doesn’t matter how much they pass on – as long as the person receiving the assets has their permanent home in the UK. This is known as spouse or civil partner exemption.
If someone leaves everything they own to their surviving spouse or civil partner in this way it’s exempt from Inheritance Tax. It also means they haven’t used any of their own Inheritance Tax threshold or nil rate band. This can be used to increase the Inheritance Tax threshold of the second spouse or civil partner when they die – even if the second spouse has remarried. Their estate can be worth up to £650,000 in 2013-14 before they owe Inheritance Tax.
You should also take advice from your solicitor as to whether or not there is any benefit in making lifetime gifts. If you make a lifetime gift and survive for seven years and provided you have not retained a benefit then normally that gift would fall out of calculation in assessing your estates for inheritance tax.
If you are in a position to do so, use of your annual gift exemption of £3,000 is a good idea to reduce the size of your estate.
Take legal advice
Regardless of the amount of your estate it is important to take legal advice about making a Will even if you only have few possessions or a small amount to leave. Your Will is probably the most important legal document you will ever prepare and it is essential that it is professionally drawn and is in accordance with your wishes. Once you have died obviously you are not in a position to clarify any ambiguities that may arise.
Our Wills, Probate and Tax advisers are:
- Paul Howden (Supervising Partner)
- Vickie Moody (Associate of The Institute of Legal Executives)
Please use the Contact Form in the main menu and we will respond as soon as possible or telephone us on 01205 364986.