Find a way to make a will
If you die intestate, you leave your grieving loved ones much extra heartache.
Sunday 19 July 2009
Writing a will may not be the happiest of tasks but it is an important one, because without one individuals risk leaving their estate to the mercy of the taxman. In addition, a will allows an individual to specify exactly who gets what rather than relying on the blunt instrument of law of intestacy, which kicks in when someone dies without a will.
Despite these risks, last week consumer group Which? revealed that 56 per cent of people do not have a will, with a third of those being over the age of 45. Almost half, 44 per cent, said that they hadn't got round to it and 18 per cent said they did not need one.
The survey also showed that ignorance over the consequences of dying without a will seems to be widespread. Two thirds were unaware that if one half of an unmarried couple dies, the children will inherit everything, leaving a bereaved partner with nothing from their partner's estate. Also, 77 per cent were oblivious to the fact that if both parents were to die, not having a will-appointed guardian could leave the courts to decide who looks after them.
"Ensuring your estate is left as you wish is vitally important – not only for you but also for family and friends. Dying without a will not only causes extra heartache for those left grieving, but also means much of the estate is lost in inheritance tax," says David Elms, chief executive of professional advice website Unbiased.co.uk.
Those not legally married are particularly at risk without a will because automatic inheritance rights do not apply. The entire estate can go to the Crown if there are no close relatives to inherit, leaving an unmarried partner with nothing. "Intestacy rules only benefit family, so a will is absolutely essential for a cohabiting couple," says Stephen McGlade, a Which? lawyer.
The nil-rate band for inheritance tax for individuals wanting to leave money or possessions to partners, friends or relatives is currently £325,000. Any amount over this is liable for tax at 40 per cent, but if the entire estate is passed on to the husband, wife or civil partner there is no IHT to pay. Additionally, married couples and registered civil partners will have any unused IHT thresholds automatically transferred to the bereaved spouse. It works as a percentage, so if on the first death 25 per cent of the nil-rate band was used, 75 per cent of the prevailing nil-rate band would apply upon the death of the remaining spouse or partner, as well as their own allowance.
Trusts for children and grandchildren often play a key role in a will and money paid into a trust which can only be accessed when the beneficiary is 18 are also exempt from tax, but only if the gift was given at least seven years before the donor passes away. There is an annual gift allowance of up to £3,000 which can be given to an individual in one tax year without IHT becoming an issue, plus an additional small gifts allowance for sums under £250 to any number of people in one year. Charitable donations are exempt from IHT as well as wedding gifts of up to £5,000 if given by a parent, £2,500 for other relatives and £1,000 for friends.
Most people use a solicitor to write their will, costing between £100 and £300. There are also do-it-yourself wills available online or from stationers for under £20. There are hundreds of websites, too, providing will- writing services, and although these sites are legal it's important to remember that there is no regulatory body. One way to protect yourself is to look for companies certified by either the Society of Will Writers or the Institute of Professional Will Writers, as members are bound by their code of ethics and standards.
Questions of Cash: Bupa costs bore no relation to what I'd been quoted
Five Questions On: Pensions advice
Problem gambling: Amid heavy advertising and a surge in remote sports betting, more and more 16 to 24-year-olds are now seen as 'at risk'
Simon Read: Retirement advice is good - if it's impartial
The HiFX guide to managing corporate foreign exchange and international payments
- 1 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 2 Students offered grants if they tweet pro-Israeli propaganda
- 4 Satellite full of sexually experimental geckos adrift in space, Russia loses control of mission
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
John Barrowman praised for Commonwealth Games opening ceremony gay kiss
iJobs Money & Business
£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar