Frequently
Asked Questions
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What is a Will?
What
can I do in my Will?
Can a letter be as legal as a Will?
What happens if I don't make a
Will?
What is included in my estate?
Can I make provision for my
children (and future children)?
Should I appoint Guardians?
Can I change my Will?
Can I attach anything to my Will?
Can I cancel my Will?
Does marriage or divorce affect
my Will?
Can my Will be changed after my
death?
What happens if I leave someone
out of my Will?
What are Executors?
What are Trustees?
What do Executors do?
How many Executors can I appoint?
Whom should I appoint as
Executors?
Do Executors get paid?
What happens to property in joint
names?
What about Inheritance Tax?
What is a gift made "free of tax"?
Can I leave with my Will a hand-written list of gifts of my personal belongings?
What does it mean if I give
someone a "life interest" in my Estate?
What's the best way to provide for my disabled child?
How can I
safeguard part of my home against care fees?
Can I choose anyone to witness me signing my Will?
What should I do with my Will after I have signed it?
Why don't you offer Wills on-line or by post?
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What is a Will?
A Will is a list of instructions telling your Executors
what to do with your assets when you die. By
making a Will you can ensure that you leave your property,
money and other assets to the people you
choose. In
England, Wales and Northern Ireland anyone aged 18 or over
can make a Will. In Scotland, anyone aged over 12 can do so.
The
legal terminology used in professionally drafted Wills can
make them difficult to understand. However, all
Wills have a broadly similar structure consisting of a
series of clauses. The more
complicated your instructions, the more clauses are needed
and the more expensive the Will becomes. Should you
require a Trust to be set up on your death, your Will can
include a provision for this, but again this will cost
more. Therefore a Will can be tailor-made to your
requirements by adding relevant and suitable clauses and
perhaps a Trust. The starting point is a Basic
Will.
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What can I do in my Will?
The rules for England and Wales are somewhat different to those
for Scotland.
England and Wales: If you
wish to keep your Will as simple as
possible, you can gift all your estate as one lump (called the "residue")
to be divided between beneficiaries, rather than
try to break it down into individual amounts or items.
However, you may if you wish gift:
- property - either as an outright gift or to give
someone the use (only) of it for a period, say, until they
remarry with the instructions that once they have
remarried the house is to be sold and the proceeds shared
among other members of your family nominated by you
- all your house contents (chattels) or individual items
- specific sums of cash - with or without an inflation
adjustment
- specific investments - e.g. shares, peps, tessas
- businesses - either an outright gift or the first
option to buy it from your estate
- residue - ie what's left after all other gifts have been
made and all your outstanding liabilities have been
settled, including your testamentary expenses which are
funeral costs, probate fees, Inheritance Tax (death duties
if total estate worth more than £285,000 as at April
2006)
You can say exactly what you want to happen to your
assets. 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 charities that are free of Inheritance
Tax (death duties). 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 you can, if you wish, include
directions regarding your funeral.
Scotland:
Please
note that what you can do in your Will in Scotland differs
somewhat to the above. Your estate is divided into Heritable Estate
(land, buildings etc) and Moveable Estate (anything not included in the heritable
estate such as money, shares, cars etc). If you make a Will then you can limit your spouse's claim to a
share in your moveable property and you can leave your heritable
estate to whoever you want. But note the survivorship exception to
that general rule. If
you have made a Will, your spouse still has the right to make a
claim. This claim is to a share in your moveable estate only.
A
Scottish business partnership is a separate legal
person and can own property. If you are 1) in a Scottish
partnership and 2) that partnership owns heritable
property then, since a share of a partnership is moveable
property that heritable property is treated as moveable for the
purposes of inheritance. For example, a widowed farmer has
a son and 2 daughters. He is in a farming partnership with
his son - the partnership owns the farm. In his Will he
leaves his share in the farm to his son. Unfortunately,
the daughters claim their share in the partnership and the
son has to sell up in order to pay them out. Had the farm
not been part of the partnership assets, his daughters
would have been unable to claim a share in it.
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Can a letter be as legal as a
Will?
Yes, a letter could be a legal Will. However, it would
need to be signed, dated and witnessed in accordance with
certain legal rules and would be invalid if otherwise. In
addition, it could be contested if the wording of the Will
is ambiguous. It is always better to have your Will
professionally written. Solicitors and Barristers make a
lot of money each year from disgruntled family members
defending or attacking DIY Wills that were badly drawn up.
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What happens if I don't make a
Will?
If your estate is worth more than £5,000 (England and Wales) or £17,000 (Scotland) then your next of kin must
apply to the courts for the power to deal with your estate
- they must apply for 'letters of administration'. If you
had a Will then your executors would apply to the Probate
Registry office for a 'grant of probate'.
When there is no Will the Rules of Intestacy
(ie the
government) state who should get what amount depending on
the total net value of your estate. The rules of intestacy
for England, Wales and Northern Ireland are different to those of
Scotland.
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What is included in my estate?
Your estate is everything you own at the time of your
death (that is in your sole name) after all your
outstanding liabilities have been settled, including
probate costs, inheritance tax (if applicable) and funeral
expenses.
Your estate doesn't include money in a joint account or
property or shares owned jointly. Also not included are life
insurance policies in joint names and those where you have
already nominated who the beneficiary should be on your
death.
From your employment, your death in service benefit and
pension is also not normally included as these are held in
trust for whomever you may have already nominated. It is,
however, sometimes recommended by trustees that you
mention in your will who you would like to benefit -
although trustees are not legally bound by your expressed
wishes in your Will.
In Scotland your estate can be
divided into:
- Heritable Estate - land, buildings etc
- Moveable Estate - anything not included in the heritable
estate such as money, shares, cars etc
If you make a Will in Scotland, you can limit your spouse's claim to a
share in your moveable property and you can leave your heritable
estate to whoever you want (but note the survivorship exception to
that general rule). If
you have made a Will, your spouse still has the right to make a
claim. This claim is to a share in your moveable estate only.
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Can I make provision for my
children (and future children)?
Yes. However, the legal definition of "children"
is your
natural children, including any illegitimate children, plus any
children that
you have legally adopted. Stepchildren are not included in
this definition, so if you wish them to be provided for in
your Will
they need to be mentioned by name.
If you have children at the moment and wish us to include
others not yet born then we can include the
words..." and any other children of mine not yet
born"
If you don't have any children at present but wish to
include the possibility then again we can do this by
including the wording as above. However, it is wise to make further provision
(naming other "reserve" beneficiaries) in case at
the time of your death you don't have any children.
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Should I appoint Guardians?
If you have children under the age of 18 (or 16 in
Scotland) you should
appoint a Guardian or Guardians. They could be appointed
to act on your death or only once you and your partner
have both passed away.
If you and your partner are unmarried then the mother of
the children will need to appoint the father as her first
choice of guardian as, under current law, he does not have
any automatic parental responsibilities and rights to the children if she passes away
first (unless the child was born after 1 December 2003 and the
father's name is on the child's birth certificate).
If you have children over 18 while one or more are under
18, then you can appoint an older child as guardian of the
younger.
A
guardian is someone whom you name in your Will with a view to that
person assuming parental responsibilities and rights
in the upbringing of your
child/children after your death. If you have children under
18 when you die and your
children do not have anyone else with parental rights then
the guardian will be entitled to take charge of the
children. Normally, unless your choice of guardian is
questionable and/or the child is in danger, the courts
and/or Local Authority will not interfere. Of course, if someone else, other than the person you
name, wishes to have the children it is open to them to
take court action and the matter would then be decided by
the Judge. Your wishes would be a significant factor in
the Judge's mind. It is sensible to make sure that the person you name is
willing to act as Guardian!
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Can I change my Will?
You can change your Will by writing a new Will or by signing a document
called a Codicil. A Codicil (like a Will) must also be
prepared, signed and executed in a particular way. You do
not need to rewrite your Will or have a Codicil if you or
any person named in your Will changes their address.
Prime Wills will only write a codicil if we
have drafted the original Will. However, you may find it is no more expensive to
re-write your Will than it is to write a Codicil.
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Can I attach anything to my Will?
No. You must not attach anything to your Will - eg by staple or paperclip
- as this will make your Will invalid.
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Can I cancel my Will?
You can cancel your Will by making a new Will, or simply
by tearing up and burning your old Will. However, please
ensure that your new Will is valid (ie it is signed by you and witnessed by
two independent people).
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Does marriage or divorce affect
my Will?
In England and Wales, your Will is cancelled automatically
if you get married after you have signed it unless the
Will contained a sentence stating otherwise, for example
if it had been drawn up just prior to you getting married.
If you get divorced after you have made it, any gifts in
favour of your wife or husband will automatically be cancelled (unless
the Will states otherwise) and therefore your Will would
be read as if they had already died. It is essential that
you consider writing a new Will if there are major changes
to your circumstances. If in doubt, please ask. We are happy to advise.
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Can my Will be changed after my
death?
Normally no. However a Deed of Variation may be exercised
within two years of the Testator's death to alter the
terms of a Will with the agreement of all the residuary
beneficiaries. There may also be instances where the court
could make a judgement. See the next question for more
details.
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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 they will not be bound by
them.
For Scotland, children and spouses have prior rights and
legal rights - see Rules of
Intestacy.
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What are Executors?
Executors are the people appointed in your Will to carry
out your Will instructions.
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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 - see What does it mean if I give someone a "life interest" in my Estate? Executors and
Trustees are usually the same people.
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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.
In
particular, the responsibilities of an Executor include:
- Finding
out what assets, property and investments the deceased had
- Having
any valuables and property professionally valued
- Listing
them and their current value
- Making
sure the funeral takes place and arranging payment
- Gaining
details of outstanding debts and bills
- Establishing
pension entitlements and other monies due
- Determining
Income and Inheritance Taxes due and making any necessary tax returns
- Completing
and submitting all Probate Registry forms when applying for Probate (in
England and Wales) of for Confirmation (in Scotland)
- Calling
in assets
- Paying
off debts
- Transferring
gifts to beneficiaries
- Drawing
up clear accounts to present to the main beneficiaries
For
a more detailed description of an Executor's duties,
please see Duties of an Executor.
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How many Executors can I appoint?
You can appoint up to four Executors, but you should
appoint at least two. You can appoint alternative
Executors in case when you die your first choice decides
not to take the position or dies before you.
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Whom should I appoint as
Executors?
Any adult person can 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 spouse or your
partner. Relatives and close family friends can be
Executors. If you appoint a professional person as
Executor do
remember that they will charge for their service. See next
section "Do Executors get paid?"
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Do Executors get paid?
Where individuals (family or friends) are appointed they
are not normally paid although you may give them modest
cash gifts in your Will as a "thank you" if you
wish. They are usually allowed to reclaim any expenses
incurred by them in the administration of an estate,
including Probate fees.
When professional executors are appointed (individual
people or organisations such as solicitors and banks),
clauses are usually included in a Will to provide that
they be paid their normal fees. They would not act
otherwise. A solicitor will often charge 3% to 4% of the
value of the estate while a bank sometimes charges 4% to
6%.
The total charge for executor work carried out by
solicitors or banks will not be known until all the work
is completed. They will invoice their charges based on the
total time taken and therefore they will not give you a
fixed quote in advance.
Prime Wills recommend Kings Court Trust Corporation
PLC,
who specialise in Probate work. They will provide a fixed price quote
(following a free, no-obligation meeting) in advance of any work being carried out and
this price may well be up to 50% less than fees charged by solicitors or banks.
We would be happy to put you in touch with them.
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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.
Partners who have been married
before often prefer to own the property as tenants in
common (usually owning 50% each). This means that when one of them dies
his or her interest in the property forms part of his or
her Estate. This then means that they can separately make
a gift in their Will of their share of the property,
perhaps to their own children from a previous marriage.
A joint tenancy can easily be converted into a tenancy in
common by a Deed of Severance (in England and Wales) or an Evacuation of
Special Destination (in Scotland), and this can either be "mutual" or
"non-mutual". Prime Wills can draw up this Deed of Severance
and register it at the Land Registry
for you (if your property is registered). If your property is not registered,
the Deed of Severance 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 the purchase of your property.
These principles of joint ownership also apply to other jointly owned assets
such as bank and building society accounts and other
investments.
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What about Inheritance Tax?
If the value of your Estate after payment of your debts
and any gifts to your husband or wife or to charity is
worth more than £285,000 (from 6 April 2006), then
Inheritance Tax will be payable at 40% on the value over
this amount.
The starting point for Inheritance Tax planning is often an
Inheritance Tax Saving Will
(usually called a Nil Rate band Discretionary Trust), not least
because such a Will has a relatively modest cost compared
to other IHT planning options, yet can save you up to
£120,000
in IHT. If you have an IHT liability over and above this
figure, Prime Wills recommend that you seek the advice of
an Independent Financial Adviser and can refer you to one
if you wish.
Please note that only couples (married, unmarried and same sex couples) can
make such a Will. If you are single/divorced/widowed and have an IHT liability,
you should speak to an Independent Financial Adviser (contact us for details).
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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 deducted from the gift itself. In Wills drawn up
by Prime Wills all gifts,
except the Residue, are free of tax unless you instruct us
otherwise. All gifts to charities are by law totally
exempt from Inheritance Tax.
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Can I leave with my Will a
hand-written list of gifts of my personal belongings?
You can do this if you have said so in your Will. You can
state in your Will that your executor is to distribute
your personal belongings according to a separate list that
you will keep with your Will (although you must not attach
the list to your Will). You can then make changes to your
"gift list" at any time thereafter without the
need to change your Will.
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What does it mean if I give
someone a "life interest" in my Estate?
A Life Interest of Residue Trust in your Will can, on your death,
enable a person or persons of your choice
to receive the income from your estate during their
lifetime. Upon their death the Trust comes to an end and
the capital is passed to the ultimate beneficiaries of
your choosing.
Trusts of this kind are often useful when you wish to give
your spouse or co-owner a right to live in your property
after your death
and then to ensure it passes to your children. This type
of Trust is suitable in a situation in which you wish to
provide for your children from a previous relationship as
well as your current spouse - ie
your responsibilities are "divided".
If you
own your home outright or own a share as tenants in common
then you may also wish to give your partner the right to
live in your home rent free until they die, remarry or for
only, say, a specified period. Once they die or after the
specified event has taken place then your home and/or the
capital sum will pass to whoever you have specified in
your Will, such as your children.
You should, however, bear in mind that unless your Estate
is fairly large, the income from it may be insufficient to
support your partner. A gift of a life interest also
causes the duties of the Executors and Trustees to 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 or capital sum and therefore cannot dispose of it
in his or her own Will. It is also important to remember
that the prime duty of your appointed 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.
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What's the best way to provide
for my disabled child?
Although not exclusively, a Discretionary Trust is often
used by families who have a relative with a disability.
Discretionary trusts are a way of putting in place
financial arrangements to help support that relative, and are particularly suitable for disabled
people.
A Discretionary Trust can also provide a way of owning
property. Sometimes families decide that in the long-term
they would like to be able to set up arrangements that
allow their relative to continue to live at home with the
necessary support.
In summary, Discretionary Trusts are used for disabled
people:
- As a way of paying for the
things the statutory services may not be able to give,
for example a holiday, a new coat or even additional
care
- As a means of owning,
managing and maintaining a property
- As a way of arranging an
inheritance
- So there is a way of
managing money or other assets
- To avoid benefits and care
funding being stopped
Income Support - and possibly other benefits such as
Housing Benefit - stops being paid if a person has more
than a certain amount of money. Benefits are withdrawn or
reduced until savings fall below the relevant level for
the benefit. If Social Services fund a residential care
place or care package they may also begin to charge for
the care service or stop funding it. A Discretionary Trust
can avoid this.
Once assets are put into the Trust they belong to the
Trust, not the person intended to benefit. He or she may
get gifts or even payments from the Trust but they cannot
be said to have any assets themselves. Trusts hold and
invest assets. This can include the family home. It may
provide a means of managing and maintaining a property.
This is particularly useful when the person lacks legal
capacity i.e. sufficient understanding to enter into a
contract. Trusts are normally set up as part of drawing up
a Will.
Trustees operate Trusts. These can be other family
members, friends or professionals. The key points about a
Discretionary Trust are:
- Trustees have discretion as
to how the assets are used - the trustees are free to
make all the decisions
- The person to benefit from
the Trust must not have a right to the income or
capital
- The intended beneficiary
must not be the only person named in the Trust i.e.
must not be the 'sole' beneficiary
Without these features the Discretionary Trust is not
properly constituted and the person may be treated as
though they own the house or have the money.
In conclusion, if you want to make some financial provision for a close
relative who is dependent on welfare benefits and/or
supported by Social Services, do not say in your Will
"I hereby leave my worldly goods to x". This
will not provide a long-term nest egg for that person. Consider instead
including in your Will a Discretionary Trust - ask your
Will Adviser for further details.
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How can I safeguard part of my home against care fees?
If
a person has to go into care, then under the
Health
and Social Services and Social Security Adjudications Act 1983,
local
authorities can charge residential care fees to (ie run up a
bill against) that person's home and after that person's
death, the local authority would normally expect the person's
representatives to sell the property to pay the care costs.
Furthermore, a local authority can sell the deceased's
property if it obtains a court order.
The house will be disregarded as part of that person's assets
(and therefore not have a charge put against it) if it is occupied by a partner or other
qualifying person.
The Property Protection Trust Will has been
specially designed to prevent the whole of the family home
being lost to pay for care fees. It keeps the share of the home owned by the deceased partner
away from the local authority's reach (in the trust) while at the same time
allowing the surviving partner who is in care to continue benefiting from
the share of the home within the trust. On
their death the assets and/or share of the home owned by
the trust together with whatever is left of the assets of
the second partner can be given to the surviving family.
Please note that married couples, unmarried couples and same sex couples can
make such a Will, but unfortunately they are not available to
single/divorced/widowed people.
Please think very carefully before giving your home away to your family to
avoid having to sell it to pay for care fees. Not only could this leave you short
of assets, it is illegal to deliberately transfer your own property
to relatives or trusts if your prime motive is to avoid
paying long-term care costs. If this was the case, a local
authority can take back the property from whoever it was
given to! The Property Protection Trust Will is a legal and valid solution, and
can prevent the loss of at least half the property to pay for care fees.
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Can I choose anyone to witness me
signing my Will?
No. They must not be a beneficiary in your Will, nor
married to a beneficiary, otherwise they will lose their
inheritance.
In England, Wales and Northern Ireland, they must
be over 18 years of age, of sound mind and not blind. You
will need two witnesses who must both be present when you
sign and date your Will. They don't need to see the
contents of your Will, only you signing it.
In Scotland, they must be over 16 years of age, of
sound mind and not blind. You will only need one witness
who must see you sign and date your Will. They don't need
to see the contents of your Will, only you signing it.
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What should I do with my Will
after I have signed it?
You should leave it in a safe place and ensure your
Executors and/or family know where it is being kept, as your
Executors will need the original Will, not a copy, on your
death. If you
prefer, we can store your Will for
you for a modest annual
fee. Ask your Will adviser for further details.
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Why don't you offer Wills on-line
or by post?
Simply because we don't think you should buy such an important
legal document in this way. For compelling reasons why, please
click here.
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