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Frequently asked questions about Wills and Tax Planning

Here you can find frequently asked questions (and the answers) on Wills and Tax Planning.
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Questions

  1. What is a Living Will?
  2. Why do I need to make a Will?
  3. When should I review my Will?
  4. What is Inheritance Tax?
  5. When does Inheritance Tax have to be paid?
  6. Can a Will be varied after death?

Answers

1. What is a Living Will?

A Living Will is a document that you can sign to say what you would like to happen to you if for example you suffered with a terminal illness or were in a coma.

2. Why do I need to make a Will?

You should think about making a Will if you want to be able to control who will receive your assets when you die. If you do not make a Will then the law determines who is entitled to what and this is not flexible and can cause complications and delays in administering your estate. By making a Will you can determine who gets what, when, how much and who is to control your assets and be the guardians of your children. We believe that everyone over the age of eighteen should make a Will.

3. When should I review my Will?

You should review your Will if your family circumstances change in anyway, for example if someone in your Will dies or you get married or divorced or do not want someone to benefit under your Will. It is also important to review your Will if your assets increase as this may affect the Inheritance Tax position. You may also wish to increase or decrease someone's entitlement or make a gift to charity.

4. What is Inheritance Tax?

This is the tax that is payable on death on all your assets over and above the Inheritance Tax threshold (currently £312,000). It is payable by your executor(s) at the rate of 40% over the threshold i.e. if your net estate was worth £320,000 then £8,000 of your estate would be taxable at 40% which means a potential tax bill of £3,200. There are certain exemptions for couples, business assets and agricultural property but you need to review the matter with us to see whether you have made full use of these exemptions.

5. When does Inheritance Tax have to be paid?

Some Inheritance Tax has to be paid before probate is granted. This can come from the deceased's bank accounts. If there isn't enough money available a loan may have to be taken out by the executor(s). The next payment is then due six months from the date of death.

6. Can a Will be varied after death?

Within two years of someone's death it is possible for any of the beneficiaries to vary their entitlement in the Will by way of Deed of Variation. This can help save Inheritance Tax or reduce the amount in the beneficiary's own estate. We have particular expertise in this area and would be happy to discuss the possibility of entering into a Deed of Variation with you.