WHY MAKE A WILL? [19/01/2016]

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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 and the Intestacy Act 1952. 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:-

You have a spouse (i.e. you are married), but no children
If your estate is worth less than £200,000 then your spouse gets everything.
If your estate is worth more than £200,000 and you have no other surviving relative (e.g. children, grandchildren, parents), then your spouse will still get everything.

If you have a spouse, no children, but parents/brothers/sisters /grandparents/ aunts/uncles
If your estate is worth less than £450,000 then your spouse gets everything.
If your estate is worth more than £450,000 then your spouse would get £450,000, plus personal possessions plus half the balance. The remaining half goes to the other relatives in this order of priority - parents; brothers/sisters; half brothers/sisters; grandparents; aunts/uncles; spouses of aunts/uncles.

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 (2009 - 2010) 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 (2009-2010). 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 £150 for an individual and £200 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.