Find a way to make a will

If you die intestate, you leave your grieving loved ones much extra heartache.

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.

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