Making a will is often overlooked and its importance underestimated. Regardless of the size of your estate you leave behind, a will can operate to dispose of it in accordance with your wishes.
Below are a few of the most frequently asked questions from clients, answered by us, to hopefully shed some light on this often unspoken subject.
I’m married with children – what happens to my estate if I don’t make a will?
If you have assets of less than £250,000, and die intestate (without making a will), then your spouse or civil partner will be entitled to the whole of your estate leaving your children with nothing.
If you die intestate with assets worth more than £250,000, and with children (including children from other relationships and adopted children), your spouse or civil partner is entitled to:
- your personal items (household goods, the car etc.);
- the first £250,000 of your other assets; and
- half of what is left.
Your children are entitled to the other half, equally. If any of your children pre-decease you, then their share is divided equally between their children.
I have been with my partner for many years but we are not married. Should I make a will?
If you and your partner are not married or in a civil partnership your partner will not be automatically entitled to any of your assets when you pass away – no matter how long you have been together – unless you make a will.
Instead, your estate will be divided among your children (or other more distant relatives if you have no children). Even if you have no relatives, your estate will pass to the Crown rather than to your partner.
Your partner might be able to claim some of your assets if they are in need or were financially dependent on you. But to ensure that your partner inherits, a will is essential.
What is an executor?
Your executors are the people who carry out your wishes after your death.
This can be a very demanding job. If you want one of your family or friends to do it, be sure to ask them first whether they are willing to take on the responsibility. If you don’t, and one of them then refuses to do it after your death (as they are entitled to do), this could mean more work for the other executor(s) or may even mean that the responsibility falls to one of your beneficiaries.
Can I appoint a professional executor?
It is common for solicitors to act as executors. Alternatively, the individuals you have chosen as executors might decide to ask a solicitor to help with the administration of the estate. Individuals, particularly if they have just lost a loved one, can find being an executor difficult and time consuming.
What happens if my marital status changes?
If you are widowed, your current will remains valid but any gift that would have gone to your spouse lapses. This can dramatically change the effect of your will: for example, if your will left most of what you own to your spouse. Your best course is to draw up a new will.
Any subsequent marriage or civil partnership will completely invalidate your current will, unless that will was drawn up in the expectation of the marriage and mentions it. Unless this is the case, you need to draw up another will, preferably before the ceremony.
Can I dispose of property I own abroad in my UK will?
The law in England and Wales says that the law governing foreign property (land, buildings etc.) is the law of the country in which the property is situated. Whether you can dispose of that property in your UK will, or you need to make a local will, depends on the law of the country in which your property is situated. Often you will need to make two wills – one in the UK and one abroad – and the two must be consistent.
A particular danger to look out for is the ‘forced heirship’ rules that apply in some countries. These say that a proportion of your property must pass by law to certain of your heirs (often only those in your bloodline – not your spouse’s family), whatever your wishes, and whatever it says in your will.
Another is inheritance tax. Land and buildings, in particular, are likely to be liable to local inheritance tax in the country where they are situated. Foreign inheritance tax can be punitively high, particularly if your beneficiaries are not family members.
You will also have to obtain a valuation of the property for the purposes of probate.
What taxes are due on my estate after I die?
Your executor(s) or administrator(s) will be responsible for the payment of any tax due on your death. This can include any outstanding income tax (on your earnings before death), capital gains tax and inheritance tax.
Your executors will not normally be able to obtain probate and start distributing your bequests until HM Revenue & Customs (HMRC) have received some or all of the required inheritance tax.
In establishing the value of the estate, HM Revenue and Customs will require the inclusion of:
- your house;
- personal items of value;
- the amount in bank and savings accounts;
- foreign property; and
- the proceeds of any life insurance policies.
What is probate?
Probate is the process through which the executor(s) or administrators of your estate get permission to deal with it. Being named in the will, or being the nearest next of kin and therefore entitled to be administrator, is only the first step: before they can actually do anything with your assets and liabilities, they need a ‘Grant of Probate’ (if you have left a will) or ‘Letters of Administration’ (if you haven’t) from the Probate Registry. Before they can get that, however, they need at least a good estimate of the values of your assets and liabilities, so the better your affairs are organised, the faster probate will be granted.
The Probate Registry will examine the application from your executors (or administrators), and may ask questions. After this, the Probate Registry will prepare an oath for your executors to sign confirming the validity of the information given, and their commitment to deal with your estate in a right and proper manner, in a standard form sworn statement.
If you would like any more information in relation to this article then please feel free to contact me via email: firstname.lastname@example.org.