Wills

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If you do not make a Will, your estate may not pass to those closest to you.

What should you do?

Make a Will

It's never too early to make a Will. Without a Will everything that you have may not pass to those closest to you and could mean that they are left without the security that you intended. It could also mean that your nearest and dearest would be left with a large Inheritance Tax bill, which could have been avoided with planning.

For further information please contact our Wills & Probate Specialist Rob Cartmell, or to arrange an appointment contact his secretary Jan Lawrence.

To assist you, we have compiled a Wills questionnaire which contains the main questions that you will need to consider before you give your instructions. The Wills Questionnaire is in PDF format and will open in Adobe Reader or Adobe Acrobat. To download the free Adobe Reader click here.

To view the Wills Questionnaire click here.

Consider Inheritance Tax Planning when making your Will

Do you know how much Inheritance Tax might be payable on your estate?  

The Inheritance Tax threshold as at April 08–April 09 is £312,000. Above this, tax is payable at a rate of 40% on your estate subject to certain exemptions. We understand that the threshold will rise to £325,000 for 2009–2010, rising to £350,000 by April 2010.  

For married couples and civil partners, the Government has introduced a special IHT relief for couples that can allow the IHT threshold to rise to a total of £624,000 between the couple.  This relief does not apply to individuals or unmarried couples. 

Please contact us further for details of this measure on how this affects your family’s IHT position.  See our Inheritance Tax section for further information and ways to mitigate tax.

USE OF WILLS FOR IHT SAVING AND OTHER PURPOSES

(i)        Save IHT on the estate of the beneficiaries of your estate (for example, save IHT to your grandchildren);

(ii)        Protect the assets against divorce of your beneficiary (for example, your children’s share can be protected against potential claim from spouse of child on divorce);

(iii)       Protect the assets for your next generation of family (ie children, then grandchildren, great grandchildren – up to a period of 80 years)

The IHT planning wills that we currently adopt 

We have different types of wills suitable:

1. THE NIL-RATE BAND TRUST WILL
(also known as The Debt Charge Will)
This Will was introduced primarily for couples prior to 2007 as a simple way of increasing a couple’s IHT threshold to £624,000.  This has largely become superseded for married couples due to the Government’s recent changes.  

However, they are still as important for unmarried couples and individuals in making IHT planning arrangements for their next of kin.  By using this kind of will-trust an individual can protect assets within a trust arrangement so that the beneficiaries do not have to include the value received as assets for IHT purposes.  The potential IHT savings for the family can be 40% of £312,000 or more, depending on the circumstances.  

This Will utilises the IHT nil-rate band and is commonly known as the Debt Charge Will or Nil-Rate Band Trust Will. It is widely used and the most common form of IHT planning. We charge a fixed cost (per couple) for preparing these wills. A personal consultation is essential to understand how the will-trusts can help your family with IHT planning. For details or to arrange a no-obligation initial consultation, contact Rob Cartmell’s secretary Jan Lawrence on 01296 620443.

2. THE EXTENDED DEBT CHARGE WILL
(also known as a DLI Will)
For estates of a couple (married or unmarried) exceeding £624,000 we recommend an extended form of the Debt Charge Will. For details or to arrange a no-obligation initial consultation, contact Rob Cartmell’s secretary Jan Lawrence. 

WHY USE TRUST WILLS?

Discretionary Trust Wills are the most common form of Wills that are undertaken by our clients.  Our advice is to any beneficiary of any Will that it is preferable for them to elect to receive their entitlement as a ‘lifetime loan’ from a discretionary trust rather than electing to receive the entitlement as a straightforward ‘gift’. The primary reasons for the use of Trust wills are:

1.         You can provide that the estate passing to your beneficiaries is ultimately held or earmarked for further beneficiaries.  Thus parents can earmark their estates to pass to each other, then on 2nd death, the value (in £pounds) of the first spouse’s estate which has passed to the 2nd spouse is owed back to the next set of beneficiaries (for example, 1st spouse’s children) even if 2nd spouse has changed their own will after 1st spouse’s death.

2.         Accordingly, the wills can utilise both thresholds of IHT (similar to the Government’s recent provisions).

3.         Assets passing through the trust to any beneficiary might be protected against claims for nursing and care fees.

4.         When estate passes ‘down the line’ to children etc, it can also be passed to them and protected for them against third party claims such as on divorce by child’s spouse, or against creditors or nursing or care home fees.

5.         Assets passing to a child or other beneficiary can be included on their estate as a debt (to the family trust) and thus deductible for IHT purposes.  Therefore, if a child ultimately receives £200,000 from their parents’ estates, this sum might be protected against being included as part of their own estate (saving £80,000 in potential IHT) even though the child has the full control of the £200,000 and be able to use that capital in the same way as if they had received it as an absolute gift.

We hope this is useful to you. You will need a discussion on these matters and to explain how they work in practice. For details or to arrange an initial consultation contact Rob Cartmell or his secretary Jan Lawrence.