Frequently asked questions
Wills, trusts and tax
Q: Do I need a Will?
A: English law has a system called intestacy that decides how to distribute the estate of someone who has died without a Will. It gives a surviving spouse a modest inheritance which may be inadequate particularly taking into account the rise in property prices. Only close family members benefit under the intestacy rules. Unmarried partners do not benefit.
It is important to make a Will to ensure your estate will go to those you intend to benefit.
Q: Do I need advice when I make a Will?
A: Many rules of law apply to decide how property is distributed at a death. The law is not straightforward. Modern property owning arrangements can make matters more complex. Joint property may pass automatically to the surviving owners. There may be life and pension policies written into trust. Apart from identifying your property that doesn’t pass under your Will, you need to ensure your Will operates to pass on the rest of your estate as you intend. It should contain appropriate powers to enable the executors to deal with your directions. Special care is needed if there are under-age beneficiaries or other trust arrangements. There are important tax considerations too.
Q: Will marriage or marriage breakdown affect my Will?
A: Marriage revokes existing Wills. Marriage breakdown does not alter a Will unless a decree absolute has been granted. In this event the former spouse will be treated as if he/she had died, thereby excluding them from benefiting under the Will or acting as an executor.
It is important to obtain advice if there are any important changes in your circumstances.
Q: What happens about my infant children if I die?
A: It is important to have in place a Will and/or other arrangements that make financial provision for your children. You ought also consider appointing a guardian or guardians to look after young children. Normally the appointment of a guardian would not take effect until the death of both of the mother and father.
Q: Will there be inheritance tax on my estate?
A: You can reduce inheritance tax on your estate by having a well structured Will. It is important to obtain advice on inheritance tax when making your Will.
No inheritance tax is normally paid on the estate inherited by the deceased’s spouse, by charities or on the estate falling within nil band for inheritance tax. Currently inheritance tax at 40% is payable on the taxable estate, although certain kinds of property may be exempt.
