Preparing a Will allows you to take control of your estate and ensure that on your death, your assets pass in accordance with your wishes. It also enables you to choose people who you trust to administer your estate and to appoint guardians of minor children.
It is important to keep your Will under review and consider whether any alterations may be needed at the following life events:
In any event, it is advisable to review your Will periodically as changes in the law may also affect what you wish to do in your Will. Minor amendments may be able to be made by Codicil.
We have experience in dealing with vulnerable clients and can advise on how to ensure that a Will is validly executed if there are any concerns about the mental capacity of the person making it. Where a person lacks capacity, we can assist in making an application to the Court of Protection for a Statutory Will to be executed on their behalf.
Inheritance tax planning
Preparing a Will can help you take advantage of the inheritance tax allowances available to you and thereby minimise the tax liability on your death.
Since 2009, the inheritance tax allowance available to each individual has been £325,000. There is no inheritance tax payable between spouses and civil partners so if all assets are left to the surviving spouse, the estate of the survivor could benefit from a nil rate band of up to £650,000.
A residence nil rate band was introduced in April 2017 creating an additional allowance when a family home passes to direct descendants which can include stepchildren and foster children. The current allowance is £150,000 and is due to rise to £175,000 in April 2020. This allowance is also transferable between spouses and civil partners.
Any gifts you make within 7 years of your death may fall back into your estate for IHT purposes and use up all or part of your inheritance tax allowance. Our team can advise on the options available to you to ensure that any cash or assets which are being given away pass effectively out of your estate. There may also be income tax and capital gains tax considerations, and we can recommend and liaise with accountants to provide advice on this aspect if necessary.
If your circumstances are more complex, a trust structure may be appropriate to help you protect your assets and hold them for the benefit of specific family members. Trusts can be set up during your lifetime or in your Will.
Trusts can be particularly useful when you have minor children or children from previous relationships or you want to provide for a vulnerable beneficiary. In some situations it may be sensible to set up a discretionary trust which can give your trustees the flexibility to decide how to distribute assets on the basis of the assets available at the time and the needs of the proposed beneficiaries.
Our team is experienced in advising on the pros and cons of different trust structures and the tax benefits and implications of the options. We will be able to prepare letters to the trustees setting out your priorities.