Why Write your Will

Many people realise the basic importance of having an up-to-date Will, but do not realise that if they do not make one certain things will automatically happen on their death.

Are you Married?

If you are married, don't assume that everything passes from one spouse to another on death. Not having a Will means that the law will decide how your possessions will be distributed, which may end up with children or other relatives (even long-lost cousins) benefiting from your estate.

Are you Unmarried?

Perhaps you have being living for some years with your partner but have never got married - you may even have children. If you die without a Will nothing passes automatically to your partner on death. Under the 1996 amendment to the Inheritance (Provision for Family Dependants) Act 1975, you can claim a share of the assets if you were living together throughout the two years immediately prior to your partner's death, but this concession still only gives limited rights to co-habitants. If you cannot fulfil this condition, you may still be able to claim support from his or her Estate if you can show they were partly or wholly supporting you before they died. But your claim will have to be considered by the courts - normally a lengthy and often costly procedure.

Do you have children?

I you have children, it's essential that you arrange a Will. Firstly, it is the best way to nominate Guardians for them; if you do not have a Will and you die before your children reach the age of 18, the courts will decide who should look after them. It's unlikely that their decision will reflect your wishes, if you are an unmarried father you may not automatically become the guardian of your natural children on the death of their natural mother. Finally, a Will protects your children's Inheritance until they are grown up.

Do you have property worth more than £285,000?

An amazing number of people are totally unaware of how much their possessions are worth, or fail to take account of their eventual value when they die. Until recently, relatively few estates attracted IHT, but this has changed radically over the past few years because of soaring house prices, particularly in London and the South East of England.
When you die, your heirs pay 40% IHT on everything you leave above £285,000 (in the current tax year 2006/2007). Whilst the price of property has risen by well over 60% in the past five years, your tax free band (the amount you are allowed to leave, other than to your spouse, before IHT kicks in) has risen by just 16% over the same period.
According to recent estimates, the sharp increase in property values and the slower rise in the nil-rate band has left around 1.4m homeowners vulnerable to IHT. There are countless ways of sheltering possessions from the taxman's grasp. Some are extremely simple, others inordinately complicated; many of these involve the use of various trusts. If properly drafted, these can save you and your beneficiaries a fortune; if not, they can create more problems than they solve.
Many married couples avoid exposure to IHT on first death by taking advantage of the fact there is no tax on assets passed between husband and wife, however, by doing this you are only delaying (not avoiding) paying Inheritance Tax. You may wish to consider leaving the whole or part of the exempt portion (nil-rate band) of your Estate to your children (or other beneficiaries) in order to save wasting your exemption on your death; your spouse will then have a further exemption on their death, thereby doubling the tax-free allowance available to the continued Estate.

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