Where there's a Will, there's a way1
Everybody should have an up to date Will yet despite many warnings (and articles like this), almost two thirds (61%) of people still don’t have one, leaving to the rules of intestacy what happens to their estate when they die.
As a minimum, you should have a Will to cover some of the following important points and to avoid any family disagreements:
- Whether you are buried or cremated
- Who your executors are
- Guardians for children aged 18 or under
- Details of any specific legacies you would like to leave
- Who inherits what – especially important if you are cohabiting with a partner, married with children from more than one relationship, stepchildren etc.
It is worth remembering that a change in your circumstances can have an affect on your Will, for example getting married or remarried effectively cancels out your previous Will, so it should be reviewed regularly, especially if you are:
- Getting married
- On separation and divorce
- Moving house
- Cohabiting with a new partner
- Expecting a baby
- Run your own business
It is really important that people protect their assets by checking their Will to take into account any change in circumstance. It is also a good idea to have a Declaration of Trust if you are buying a house with a partner, especially if one is putting in a larger deposit or you are moving into their property.
The Government’s recent changes to the Inheritance Tax threshold announced in the recent budget will also impact on Wills and IHT Planning.
At present, inheritance tax is payable at 40% on the value of an individual’s estate in excess of the tax-free allowance of £325,000 per person. For married couples, this can be a combined £650,000 allowance.
From April 2017, there will be a further additional £175,000 “family home allowance”. This will be added to the existing £325,000 inheritance tax threshold in stages, bringing the total transferable tax-free allowance for a married couple or couple in a civil partnership to £1m by 2020.
As with any changes of this nature and significance, I would suggest people review their current Wills to ensure it is still relevant and of course up to date to deal with any change in their circumstances. If you haven’t yet made a Will, it is never too late and I would urge everyone over the age of 18 to have one.