Why make a Will?
The perils of intestacy
For all the benefits and life changes that modern technology and medicine has brought us, human mortality remains (for now) one of life’s two great certainties (along with taxes of course). Many people put off planning their affairs, but it is something we ought to address at least once every few years. Unfortunately, recent studies have shown that only 38% of adults in the UK have made a Will. When a person passes away without a Will, is it called intestacy. Under the intestacy rules, the assets of the deceased are divided between the surviving relatives according to the formula set by legislation. In some cases, this may make little difference, but in many cases it will mean two things:
- Additional Inheritance Tax that could have been avoided; and
- Relatives or loved ones being insufficiently provided for
For example, if a person had a partner with whom they were not married or in a civil partnership, the partner would not receive any part of the estate if that person died without a Wil. Wills are therefore a vital tool in ensuring that our wishes are followed, and the right people or charities receive what we would want them to receive. In certain cases, dying without a Will can even mean that all of the person’s assets go to the government.
The tax advantages of making a Will
Wills are also an important part of making sure our assets and investments are held efficiently, from a tax perspective. Inheritance Tax must be paid when a person dies with an estate that is worth more than £325,000, or if they left their home to direct descendants, £425,000. Due to the prices of housing in the South East of England, many homeowners will have an estate with a value that exceeds this level (known as the nil rate band (NRB). Careful tax planning and Will drafting can help to keep the Inheritance Tax liability as low as possible.
Why use a solicitor for Probate?
Probate is the process of enabling personal representatives to administer the estate of a person that has died. Where the deceased person had made a Will, the Will names one or more executors to carry out their wishes. If they did not make a Will, or the Will failed to name executors, the Non-Contentious Probate Rules determine who should act as administrator of the estate. Either way, the process involves determining the value of the estate, paying any Inheritance Tax which is due, and applying to the Probate Registry for a grant of representation, to enable the personal representative (whether as executor or administrator) to distribute the person’s estate. After the grant, the estate must be distributed.
There is no legal requirement to use a solicitor for applying for probate, and some people manage to navigate the process by themselves. However, there are two clear advantages of using a solicitor to apply for probate:
- Tax efficiency
- Time efficiency
Use a solicitor to save tax
Administering an estate is time consuming, and can be complex. It combines working through the rules of probate, and understanding how Inheritance Tax works. Solicitors who are used to dealing with probate and administering estates will know how to ensure the correct calculation is made for Inheritance Tax, making use of all of the exemptions which apply to an estate. This is important, because failing to use an exemption can cost you thousands of pounds in additional and unnecessary tax being paid.
Use a solicitor to improve your well-being
Recent studies have shown that people who pay for a service to save themselves time improve their sense of well-being more than when people use that some money to buy goods. The process of administering an estate is more than just time-consuming. It can also be fraught with emotion and stress. Solicitors can deal with all aspects of the process, making sure you, the executive, are protected from personal liability, and giving you the space to grieve for your lost loved one.
To discuss making a Will or advising on probate in Holland Park or Morden, contact us using the form below.