Why is making a Will so Important?
A lot of people will keep delaying their will for a number of reasons, for example, some believe that the ones they are closest to will receive all of the inheritance and other people believe that it is something that they should do in later life. The main problem with this is that a lot of people wait until it is too late. If you die and you haven’t got a will, then it will be up to the law to decide who gets what from your estate and this is a chance that a lot of people don’t want to take. After all, it may mean that your possessions don’t go to who you would want them to go to and if you have a husband or a wife, they won’t inherit all of your estate on an automatic basis.
Who Actually Needs To Make A Will?
Everyone, actually. Most importantly it is those who have dependant relatives however. This includes those who have children who are over the age of 18, those who have elderly relatives and those who are relatives with people who have disabilities. Making a will is also important for those who have possessions that they would like to go to certain friends, family or charities.
Why Won’t Everything Go To My Husband/Wife/Child Automatically?
This is something that a lot of people misunderstand. The size of your estate will depend on how ti is shared out and there are plenty of rules that determine who inherits what if you don’t make a will.
What If I Don't Make A Will?
This is called died interstate. There are actually specific rules in place which determine who will inherit and how much if you don’t make a will. This may not be along the lines of what you wanted and in some instances your estate may go to the Crown if it turns out that your relatives can’t be found or traced.
Is It Hard To Make A Will?
Not at all! All you need to do is make a list of your assets and your property, as well as stating who you want to benefit from this. You also need to take into account any dependant relatives and those who you want to look after your children when you are away.
Who Can Become A Witness?
You can become a witness if:
• You are not blind
• You are capable of knowing what is going on
• You are 18 years or over
You can’t become a witness if you are:
• Set to receive something in the will
• A partner of the beneficiary
In these certain circumstances, the will remains to be a legal document but the beneficiary can’t be paid in this matter.
Lasting Power of Attorney
What/Who Is A Lasting Power of Attorney?
An LPA is a document which a lot of people, unfortunately, haven’t heard of. It means that you can appoint someone who you know you can trust to take full control over your estate and your will if you feel as though you are going to be incapable of doing so.
Are There Different Types of LPA?
There are in fact two different types of LPA.
Some LPAs deal with the financial and property aspect and they also replace the Enduring Powers of Attorney as well.
Other LPAs however deal with the health and welfare aspect where the donor, or the person who is making the LPA us alive and making arrangements for day to day care and choosing whether or not they receive medical treatment.
What Actually Is Inheritance Tax (IHT)?
IHT is a flat rate that covers 40% in the event of your death or 20% if it is during you lifetime. It is paid out depending on the value of your estate.
What About Exceptions?
You may pass on certain gifts without actually having to pay inheritance tax. This is even the case if it is over the threshold.
Your estate doesn’t usually need to owe inheritance tax if you are leaving it to a spouse. This spouse needs to have a permanent home in the UK. This is the case even if you are over the threshold and you can make gifts to them throughout your lifetime as well.
You can make small gifts as long as they are not over £250. This can be done to many different individuals and it is all tax free.
Farm Relief, Heritage, Woodland and Business
If you die and you own a woodland, farm, business then you may not need to pay as much tax when compared to standard possessions.
Civil Partnership and Wedding Gifts
When you give a gift to someone who is getting married, you may be exempt from the full property tax.
You are actually allowed to give out £3,000 every year, whether it is over several gifts or single gifts every single year. You can also use any allowance from the previous year as well, but you need to use the current year’s allowance up first.
If you are alive after 7 years of giving a gift to someone then this is exempt from the inheritance tax, regardless of what the value is.
What Are The Rules When You Pass On A Property?
When you give away your home, this is actually considered as you making a gift. This means that the laws regarding property can be very complicated so it is always a good reason to contact us if you are planning on doing this.
When you do pass on a property however, there are two things that you need to think about. There is the 7 year rule, and this means that you can make a gift to someone, no matter what it is worth and you won’t need to pay any inheritance tax if you are alive for 7 years after the gift was made. Another thing that you need to think about is gifts that you benefit from. For example, if you give your gifts away to your children with various conditions attached or if you keep on benefiting from the gift then this is known as a reservation benefit gift. This won’t be except from property or inheritance tax, and the 7 year rule does not apply in this instance either.
What's A Trust?
A trust is a legal arrangement where trustees are legally responsible for keeping assets safe. The assets can include things such as buildings, shares, money or even land. The people who are classed as trustees are responsible for carrying out the will of the person in question. This is normally written in the will and it is called a trust deed. Trusts can be set up for a number of reasons, it may be so you can control and protect the assets of the family or it could be because the person in question is too young to handle their own affairs. It is also viable for someone who can’t handle their affairs because they are incapacitated. Trusts can be used to pass on money while you are still alive and it can also be used to pass on money when you die, but there are a number of different trusts available so it is always a good idea to look into them before you start investing in one for you or your family.