Whitehaven News

For their sake, make a will now

Last updated 09:30, Monday, 31 March 2008

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Put it in writing: A will won’t hasten your death but it will make life easier for your family when the time comes

A will is a very personal document. It is often a statement based on our innermost feelings towards those closest to us and, when executed after our deaths, will frequently have a significant impact on those left behind.

Rather more mundanely, it is also often the final piece of tax planning that you can do. Get it wrong and the Chancellor of the Exchequer can be an unintended beneficiary.

A bad will or no will at all can also cause major problems after your death.

If you die without having a will, it is called dying intestate. Some people assume that a wife will always inherit on her husband’s death (and vice versa) but this is by no means always the case.

There are strict rules which limit the amounts going to a surviving spouse and how much the children get.

In England, where there are children, the spouse takes the first £125,000. The balance is split 50/50 between the spouse and children – with the spouse only being able to take the interest on their share for the remainder of their life before it goes to the children.

Dying intestate can sometimes create an inheritance tax liability unnecessarily and will nearly always increase the costs of administering an estate.

That brings me to my first firm piece of advice – make a will. It does not bring death any closer but it can make a huge difference to your family when the time does come.

Having said that, you should be aware that not all of your assets will be subject to the provisions of your will. If you own assets jointly with someone, then the survivor inherits automatically. This happens most often with married couples owning their homes together or with joint bank accounts.

When you do make a will, therefore, it is important that you are aware of the way that your assets are structured – are they jointly owned or not?

In some cases it will be possible to rearrange matters differently but you do have to be aware of the issues.

Second piece of advice – speak about your will with a specialist in inheritance tax and related issues.

One feature of life is change. We change. Our families change – both in numbers as well as everything else. Our assets change in value and in composition. Finally, the law also changes.

Your will should ideally be able to deal with some of these factors but there is a limit. You should certainly be prepared to review your will from time to time.

Last October there was a major change in the inheritance tax rules for married couples – and for many widows and widowers even if bereaved many years before. I will return to the detail of this in later weeks but, for many, now is the time to review your will.