Making a will is something everyone should do no matter your age as no one can ever be sure of what lies around the corner. As you go through life and your situation changes then you may have to alter your will but at least you will know that should the worst happen then you will have done everything you can to provide for those who are close to you.
Wills can be very simple documents if you have limited assets to extremely complicated documents where your finances are complicated. Engaging a solicitor to do this for you will ensure that you have fully understood everything that is involved and how your decisions will affect the people you wish to mention in your will. Expatriates.co.uk can help you by introducing you to specialist solicitors experienced in this field. By completing the simple application form you will have taken the first step in arranging your affairs.
If you were to die without making a will then your estate will be divided according to the Law and this may not reflect your wishes. It is not unknown for sizeable estates to be eaten up by search costs associated with finding far removed members of your family who may reside in remote parts of the world. Years of searching can pass during this process and while it is going on your affairs are on hold. Were this to happen a dependant family member could struggle.
Some reasons for making a will
- To appoint a guardian for your children under age 18, should you die.
- To ensure your assets go to your loved ones in the way that you would wish.
- To stipulate how old any children should be when they inherit your assets – would you trust an 18 year old with your wealth?
- To set up trusts for family members or disabled beneficiaries
- To avoid disagreement over your estate by clearly specifying your wishes
- To avoid your assets going to the Crown if you have no family
- To cover all possible situations– for example who would inherit if your main beneficiary died before you?
- To minimise any Inheritance Tax liability
- To express your funeral wishes
Estate admin and intestacies
The process for administrating an estate will vary depending on a number of factors but the first will be establishing if the deceased left a will.
When a person dies leaving a Will there will be named Executors who have the responsibility of ensuring that the deceased’s estate is administered correctly and the beneficiaries receive their inheritance. However, when someone dies without having made a Will it is known as Intestacy.
With intestacy there is a strict legal order as to who may apply to be the Administrator of the estate and once an administrator is appointed he or she will be faced with a strict legal order as to who inherits what assets.
Executer of a will
Being the executer of a will is an onerous task and not one you should enter into lightly. When a person dies the executer becomes responsible for everything associated with the estate such as collating assets and debts and applying for a grant of probate which will allow the executer to distribute the estate in accordance with the will. It should be noted that any powers of attorney held by others on behalf of the deceased will terminate on death.
Things the executer will do
- Estate valuing – make a list of the deceased’s possessions and debts.
- Correspond with creditors and debtors– notify and corresponding with all relevant organisations to establish the assets and debts associated with the estate..
- Pay bills – pay any bills, debts and charges on the estate.
- Missing assets – search for any missing assets that are known to exist
- Probate – Apply for a grant of probate.
- Tax – Pay any inheritance tax against the estate.
- Legacies – Distribute the legacies set out in the will.
- Estate accounts – prepare and distribute to interested parties.
Inheritance tax planning
Inheritance Tax (IHT) is currently charged on estates worth more than £325,000, the nil rate band. If your estate is worth more than this then its value less the nil rate band would be liable for IHT at 40 percent.
Married couples have an exemption for assets passing between them but cohabitees do not. If you are a widow then you can benefit from your predeceased spouses nil rate band and effectively have an exemption of up to £650,000 which is known as the transferable nil rate band.
People tend to underestimate the value of their estate particularly if there are a mix of assets such as property or businesses, savings and investments, pensions or death in service benefits and life insurance. It is therefore a good discipline if you own valuable assets to ensure that they are managed well through your life. More information on this is available from our wealth management section accessed via the link. (SEE LINK).
To ensure as much of your estate as possible goes to your loved ones it is essential you take professional advice to understand what can be done to minimise any tax liability and expatriates.co.uk legal partners can help you with this..
Lasting powers of attorney
A lasting power of attorney (LPA) is a document authorising someone else to deal with your affairs on your behalf. This can be a vital document should you be physically or mentally unable to deal with your affairs yourself.
Without a lasting power of attorney no one will have any authority to deal with your affairs should you become unable to handle them yourself and in such a case your only option would be to apply to the court of protection for a deputyship order.
A lasting power of attorney sets out who you want to deal with your affairs and gives them the right to do so when you can no longer manage but you can limit their powers and you can appoint back up attorneys and stipulate when they should act. There are two types of LPA, one that relates to your Health and Welfare management and one relating to your property and day to day affairs. A lasting power of attorney is a very useful document which everyone should consider having.
A Trust is a legal document enabling you to transfer your assets to trustees who will manage them for the benefit of someone else, known as the beneficiaries. Trusts can be used for numerous reasons either during your lifetime or after your death through a Will to ensure that your assets go to people you want to inherit.
- Leaving money to children – a simple Trust would be where monies are left to a child in a Will but they cannot have the money until they reach the age of 18 or later. During this time the Trustees have an obligation to look after the money for the benefit of the child and would be able to allow any guardians access to the money for the benefit of the child whilst retaining control of the asset. However trusts can be used for many more reasons, including asset protection and tax planning.
- Second Marriages – Sometimes people wish to have a Trust when they are in a second marriage. For example you may want to ensure your spouse can live in the home but ultimately you want your children from a first marriage to inherit everything. A good solution would be to have a life interest trust. This means the surviving spouse would have the right to live in the marital home rent free until they die or remarry. If they don’t want to live there then they could rent the property out and receive the rental income. However the house does not become theirs. When they die or remarry the house will pass to the children from the first marriage. This provides you with the peace of mind in knowing your spouse is looked after but your children will still inherit what is yours.
- Life insurance policies – Life insurance policies can be written in trust and this could allow the money due on death to go straight to your chosen beneficiaries without being first include in your estate and so not qualifying for inheritance tax.
Contentious Probate actions
Contentious Probate is a dispute relating to inheritance or the validity of a Will. When a loved one passes away and the value if their estate is above the threshold their Estate must go through the process known as Probate. A grant of probate is a court order which gives one or more persons the legal authority to correctly distribute the deceased’s estate to the beneficiaries.
Where a beneficiary disputes the validity or accuracy of a Will or makes a claim on the estate because it failed to provide sufficiently for the claimant, contentious probate arises. This can give rise to complications but expatriates.co.uk partner solicitors will understand these matters and can act for you.
Court of protection applications
If somebody loses their mental capacity it may be necessary to apply to the Court to take over their affairs. This can be a very complex and time consuming process but expatriates.co.uk partner solicitors will understand these matters and can act for you.