Why Make A Will [04/04/2018]

<-- go back WHY MAKE A WILL? If do you not make a Will then on your death the law states that you died ‘intestate’. The law will dictate who will inherit from your estate, the guardianship of your children and who will administer your estate following rules laid down by the Administration of Estates Act 1925 as amended by the Inheritance and Trustees Powers Act 2014 (ITPA 2014). This may result in a person who is either unsuitable nor of your choice winding up your estate and your estate being given to persons you would not like to benefit. At present, the following distribution rules apply:- If you have a spouse but no children Your spouse gets everything. If you have a spouse, plus children If your estate is worth less than £250,000 then your spouse gets everything. If your estate is worth more than £250,000 then your spouse would get £250,000 plus personal possessions and a life interest in half of anything over this sum (i.e. the right to take interest on the remainder, but not the capital itself). Your children would get half the sum over £250,000 immediately and be entitled to the other half on the death of your spouse. Should any of your children die before you then their children would be entitled to take their parent's share. If you are not married, but have had children Your estate will be shared between the children. Should they die before you then their children would take their share. If you are not married, have no children, but have parents or have had brothers/sisters/grandparents /aunts/uncles Your estate will be shared equally amongst them in this order of priority - parents; brothers/sisters; half brothers/sisters; grandparents; aunts/ uncles; spouses of aunts/uncles. If any of these have predeceased, but have living children then the children will take their parent's share. If you are not married, and have no other relatives YOUR ESTATE WILL GO TO THE CROWN. Please note that "children" includes natural, adopted and illegitimate children, but excludes step-children. A partial intestacy may arise if your Will does not deal with all of your estate or your executors predecease you. In this case the intestacy rules will either decide on the distribution of the estate or who will administer the estate. Finally the process of dealing with an intestate estate is far more protracted and expensive and causes distress to those left behind. GUARDIANSHIP AND PARENTAL RESPONSIBILITY You should consider who will be responsible for those of your children who are under the age of 18. Guardians must be appointed in writing, so appointing them in your Will is essential, if you have not already made provision. The appointment of guardians in a Will take effect on the appointor's death, provided that there is no surviving parent with parental responsibility for the child at that time. If on the appointor's death there is someone with parental responsibility the appointment generally takes effect only on the death of that person (unless there was a sole residence order in favour of the appointor in force at death). Parental Responsibility is defined under The Children Act 1989 (the ‘Act’). If the child is legitimate (or has been legitimated, or is adopted), the parents (or adopting parents) will each have parental responsibility and both may appoint guardians for the child in the event of their respective deaths. Under the Act where the parents were not married to each other, the mother automatically has parental responsibility but an unmarried father could acquire parental responsibility either by agreement with the mother, or by obtaining an order from the Court. The Court would normally grant an unmarried father parental responsibility, provided he could show his commitment to the child(ren), for example, by having regular contact. However, from lst December 2003 the law has changed. The father of a child who is not married to the mother acquires parental responsibility for that child if he is registered as the father in accordance with the relevant provisions of the Births and Deaths Registration Act 1953. This change in law only applies to births registered on or after lst December 2003 (irrespective of the date of birth of the child). The law remains unchanged for births registered prior to lst December 2003. INHERITANCE TAX Inheritance tax is a tax payable on death. The current rate (2017) for Inheritance tax is 40% and is payable on your ‘chargeable estate’. Your ‘chargeable estate’ is all assets, including your house, in excess of the ‘nil rate band’ currently £325,000.00 (2017). Planning during your lifetime can minimise the potential tax liability. If you require advice as to the potential Inheritance Tax Liability on your estate we will need to know the type of assets you own and their approximate values and details of any gifts other than seasonal gifts such as Christmas, birthday gifts. We will also need some idea of your future financial requirements and priorities. It should be noted that any advice given will be on the basis of your current financial position and current law both of which are likely to change with the passage of time. THE COST It is our general policy to keep the cost of a Will as low as possible. For a straightforward Will, the cost will normally be in the region of £200 plus VAT for an individual and £275 plus VAT for husband and wife (assuming their Wills are similar). If the Will is complex or requires several meetings or if you require from us a review of your potential Inheritance Tax liability and/or suggestions as to how to reduce that liability, the cost will, of course, be greater. We are happy to store your Will in a safe storage and provide you with copies. OTHERS MATTERS LASTING POWERS OF ATTORNEY There are two types of Lasting Power of Attorney. The first allows you to choose who should look after your financial affairs if, through mental incapacity, you are no longer able to do so yourself. The second contains directions which are given to those who care for you as to what treatment you do and do not wish to receive if you are not capable of expressing your wishes at the time. Your incapacity in either case can be due to an accident or old age. Without an Lasting Power of Attorney the Court of Protection will appoint a Deputy if you are unable to manage your own affairs. This can take up to 10 months and cost at least £1,800.00 during which time your finances could be seriously damaged and decisions regarding your healthcare could only be made by the doctor treating you. The person authorised by the Court to handle your affairs and make decisions may not be the person you would have chosen and may even be a Court Official who can (and will) charge for his/her time. If your Deputy is not a court official they will also have to provide a ‘security bond’ of a least £200.00 per annum, as well as the on going costs charged by the Court of up to £800.00 per annum as a supervision fee. Our standard costs for completing LPA’s are as follows: - Our charges for acting in relation to the LPA’s £ 350.00 PLUS VAT Our charges for acting in relation to being Certificate Provider £ 150.00 PLUS VAT Office of the Public Guardian registration fee (per LPA) £ 82.00 FINALLY We recommend that you reconsider your Will every few years to make sure there have been no changes in your circumstances, in those of your Beneficiaries or in the law or tax system which make alterations to your existing Will desirable. DO NOT ATTEMPT TO AMEND YOUR EXISTING WILL BY HAND - changes made in this way will invalidate your Will which will mean your estate will be either intestate or partially intestate. You will need to make a new Will after marriage as the whole Will is cancelled unless it was made in contemplation of marriage and states so in the Will. On divorce your Will remains valid but the gifts to your former spouse are cancelled as will their appointment as Executor. This only comes into effect once the divorce is made absolute. If you want to discuss any matters raised above, please contact us or make an appointment to see Jane Propert. Beaufort Square, Chepstow, NP16 5EP Telephone 01291 606060 This guide is not intended as an exhaustive statement of the law it is merely written to enable our clients to have an overview of the subject. © Properts Solicitors