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1. What is a Will?
A Will is a list of instructions telling your Executors what to do with your property when you die.
2. What happens if I don't make a Will?
Your property will be divided according to certain
legal rules (the "intestacy rules"). Some of them may surprise you. For
example, the share your husband or wife gets may not be enough to give him
or her outright ownership of your home. Also, if you are not married but
have been living with someone, the person you are living with will not get
anything. The following will give you a rough idea of how the rules
work:
If you are single (i.e. unmarried, widowed or divorced) with no
children or grandchildren your property goes:
to your parents or whichever one is living; if both your parents
are dead, to your brothers and sisters, and if any of your brothers or
sisters are dead, the share of that brother or sister goes to any of their
children who survive you; if both your parents are dead and you have no
surviving brothers, sisters, nieces or nephews, then to any half brothers
or sisters (and if any of them are dead, their share goes to any of their
children who survive you); if none of the above survive you, then your
grandparents and then to any aunts or uncles and after that to various
more distant relatives; if you have no relatives, or only very distant
ones, your property then goes to the Crown (i.e. the Government).
If you are single with children or grandchildren your property
goes:
to your children in equal shares; but if any of them have died
their share will be divided between any of their children.
If you are married with no children or grandchildren:
the first £125,000 of your property goes to your husband or wife
plus one half of the remainder; the other half goes to your parents or
whichever one is living; if both parents are dead, the other half will go
to your brothers or sisters or, as above, to the children of any who have
died before you; if none of the above survives you, then your husband or
wife gets everything.
If you are married with children or grandchildren:
the first £75,000 of your property goes to
your husband or wife plus a life interest in one half of the remainder
(this will eventually pass to your children or grandchildren on his or her
death); the other half goes directly to your children or, as above, to the
children of any who have died before you.
When these rules are applied it usually does not matter whether a
person is legitimate, illegitimate or adopted. Thus, for example, your
adopted children have the same rights as your natural children, and the
same is true for any of your children whose mother is not your wife or
whose father is not your husband.
3. Can a letter be legal as a Will?
Yes, a letter could be a legal will.
However, it would need to be witnessed and could well be contested if the
wording is ambiguous. It is always better to have your will professionally
written.
4. What can I do in a Will?
You can say exactly what you want to happen
to your property. You can make "thank you" gifts of money. You can make
gifts of personal belongings that are special to you and the person to
whom they are given. You can make gifts to charity which are free of
Inheritance Tax. You can appoint Guardians to look after your young
children. You can choose who you want to be your Executors and Trustees.
Fundamentally, your Will is a record of your instructions on how you want
your estate to be distributed and also gives you the opportunity to
express your wishes about your funeral.
5. Can I change my Will?
Yes, but only by signing a document called
a Codicil. This must also be prepared, signed and executed in a particular
way. You do not need a Codicil if you or any person named in your Will
changes their address. A Codicil is useful for minor changes to your Will.
If you wish to make major changes it is often preferable to write a new
Will.
6. Can I cancel my Will?
You can cancel your Will by making a new Will, or simply by tearing it up and burning it.
7. Does marriage or divorce affect my Will?
A Will is almost always cancelled
automatically if you get married after you have made it. If you get
divorced after you have made it, any provisions in favour of your wife or
husband will be cancelled unless the Will says otherwise. It is essential
that you consider writing a new Will if there are major changes to your
circumstances.
8. Can a Will be changed after my death?
Normally, no. However, there may be instance where the court could make a judgement. See the next topic for
more details.
9. What happens if I leave someone out of my Will?
If you have not properly provided for any
of your dependants who are unable to maintain themselves, or if you have
not been fair to your wife or husband (or even an ex-wife or ex-husband
who has not remarried), the Court can alter your Will. Your reasons for
not having provided for someone should be given in your Will or in a
separate letter which can be referred to in your Will. The Court will
consider these reasons but it will not be bound by them.
10. What are Executors?
Executors are the people appointed in your
Will to carry out your instructions.
11. What are Trustees?
Trustees are the people appointed in your
Will to look after your property until for example, a child is old enough
to inherit or where there is a life interest. Executors and Trustees are
usually the same people.
12. How many Executors can I appoint?
You can appoint up to four Executors, but
you should appoint at least two. You can appoint "reserve" Executors in
case your first choice decides not to take the position or dies before
you.
13. Whom should I appoint as Executors?
Any adult person or a bank may be appointed
as an Executor. One of them could be the person who is going to receive
the biggest share of your estate, such as your husband or your partner.
Relatives and close family friends can be Executors. There is also a
government department known as the Public Trustee. It's easy to appoint
another Executor later if you want to do so by means of a Codicil. If you
appoint a professional Trustee do remember that they will charge for their
service.
14. Do Executors get paid?
Only if the Will says so. Most Wills provide that
professional people or banks should be paid their normal fees. They would
not act otherwise. A solicitor would normally charge around 2% to
3% of the value of the Estate. A bank's fees would be considerably
higher at 4% to 6% of the value of the Estate. Check with your bank before
committing yourself as not all banks provide the service.
15. What do Executors do?
Executors bring together all your assets,
pay your debts and any gifts of money, transfer any gifts or personal
belongings and deal with the remainder - your Residuary Estate - in
accordance with your Will. Often non-professional Executors will ask a
solicitor to do some or all of the work for them.
16. Should I appoint Guardians?
If you have children under the age of 18
who may be left with no parents you should appoint a Guardian or Guardians
if you know of anyone suitable.
17. What happens to property in joint names?
People who are "co-owners" of property hold
it either as "joint tenants" or as "tenants in common".
Husbands and wives are usually, but not always, joint tenants. This
means that when one of them dies the other one automatically becomes the
owner of the whole of the property. It also means that a joint tenant
cannot make a gift in a Will of his or her share of the property.
Business partners are usually, but not always, tenants in common. This
means that when one of them dies his or her interest in the property forms
part of his or her Estate. It also means that a tenant in common can make
a gift in a Will of his or her share of the property.
A joint tenancy can easily be converted into a
tenancy in common by one of the co-owners giving a written notice to the
other saying that the joint tenancy has been "severed" and that they are
now tenants in common. Bequest Wills can draw up this notice for you. Such
a notice should be placed with the deeds of the property.
If you don't know whether you are joint tenants or tenants in
common, you should consult the solicitor who acted for you on your
purchase of the property.
These principles also apply to other jointly owned assets such as bank
and building society accounts and other investments.
18. What about Inheritance Tax?
If the value of your Estate is more than
£231,000 (from 6 April 1999) after payment of your debts and any gifts to
your husband or wife or to charity. Inheritance Tax may be payable at 40%
on the value over this amount. Your solicitor or accountant can advise you on ways
of reducing or removing the impact of Inheritance Tax.
19. What is a gift made "free of tax"?
A gift is free of tax when any Inheritance
Tax, if it is payable, is to be paid out of your Residuary Estate and not
to be taken out of the gift or otherwise paid by the recipient. All gifts to charities are, in any case, exempt from
Inheritance Tax.
20. After I have signed my Will can I leave with it a list of gifts of personal belongings?
You can do this if you have said so in your
Will but do not attach the list to your Will. It is better to include each
individual gift as part of the Will.
21. What does it mean if I give someone a "life interest" in my Estate?
If your responsibilities are "divided",
e.g. you wish to ensure that your partner is adequately provided for but
feel you have a duty towards, say, children of an earlier marriage, then
you may wish to consider giving your partner a "life interest" in your
Estate. This restricts the partner's inheritance to the income only of
your monetary assets and the use of your home. On the death of your
partner the capital will pass to whoever you have specified in your Will,
such as your children.
You should, however, bear in mind that unless the Estate is fairly
large, the income may be insufficient to support your partner. The duties
of the Executors and Trustees will also be more onerous.
When considering a gift of a life interest, it is very important to
remember that the recipient does not own the property in your Residuary
Estate and cannot dispose of it in his or her Will. It is also important
to remember that the prime duty of the Trustees is to keep a fair balance
between income for the person getting a life interest and capital growth
for those who will be ultimately entitled to your Residuary Estate.
22. What should I do with my Will?
You should leave it in a safe place. Your
Executors will need the original. Your solicitor can arrange for
your Will to be stored at The Principle Registry of the family division
for a modest fee.
23. What is a "Living Will"?
A "living will" (also called an advance
directive) is a set of instructions issued in advance to the medical
practitioners who may be involved in looking after you in the future.
People making a Living Will state that they do not wish their lives to be
artificially prolonged when suffering from a terminal illness or other
degenerative conditions.
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