Frequently Asked Questions – Trusts, Wills and Tax
When should I make a Will?
We would strongly advise anyone to make a Will, but it is particularly worth thinking about making sure you have an up-to-date Will when you buy your first home, get married, have children, or there are any other major changes in your circumstances.
It is usually a good idea to review your Will at least once every 5 years to make sure it still reflects the current state of your estate, any dependants you have and your wishes.
How can I make sure my Will is legally valid?
For your Will to be considered legally valid, you must:
- Be at least 18 years old
- Make the Will voluntarily
- Be of sound mind i.e. have the mental capacity to understand the contents of the Will
- Make your Will in writing
- Sign your Will in the presence of 2 witnesses (who must both be over 18 and neither they nor their spouses can be beneficiaries of the Will)
- Have your 2 witnesses sign the Will in your presence
While it is not a legal requirement, it is usually a good idea to have your Will dated to avoid any confusion about which is the most up-to-date version.
What happens if someone dies without leaving a Will?
If someone dies without leaving a Will, how their estate is divided will normally be decided according to the standard rules of intestacy. Who inherits will depend on the value of the estate and what living relatives the deceased has a spouse and then their children being prioritised.
For an indication of who is likely to inherit when there is no Will, you can take a look at the government’s intestacy tool.
Can a Will be challenged?
There are two main grounds on which you may be able to challenge a Will:
- You believe the Will is invalid i.e. you believe that the testator (the person making the will) lacked capacity, it was not prepared properly, does not reflect the wishes of the deceased or there is a more recent Will that should be used instead.
- You were a dependant of the deceased and believe the Will does not make ‘reasonable provision’ for you.
In many cases, Will disputes can be resolved through negotiation and other non-confrontational techniques. This can allow everyone involved to reach an amicable agreement while minimising any negative emotional fallout.
What are my responsibilities as an Executor?
The Executor of a Will has various duties, including:
- Notifying all relevant parties about the death, including HM Revenue & Customs (HMRC), the Department of Work and Pensions (DWP) and utility companies.
- Applying for Grant of Probate to gain control of the deceased’s estate.
- Paying off any outstanding debts that the deceased had.
- Identifying all of assets included in the deceased’s estate and their total value.
- Calculating any tax owed on the estate, including inheritance tax and capital gains tax, and ensuring this is paid.
- Selling any property included in the estate or transferring it to the relevant beneficiary.
- Distributing all remaining assets from the estate to the intended beneficiaries.
We appreciate that this can be a lot of responsibility to take on at an already difficult time. Our solicitors are here to offer as much assistance as you need, including handling the entire probate process for you if required.
How long does probate take?
This will depend on the circumstances, including how complex the estate is and whether there are any challenges. The more complicated the process it, the longer it will take and the more likely the executor will need advice.
However, for straightforward estates, it can often take as little as 3 to 5 weeks as long as there are no unexpected complications.
Can probate be stopped?
If you have concerns about the probate process, such as whether the Will being used is valid or over the person who will be acting as Executor, it is possible to stop an Executor from applying for grant of probate.
This is done by entering a ‘caveat’ which prevents grant of probate from being given and lasts for 6 months. This is usually done through a solicitor and the caveat can be renewed after 6 months if the issue or issues you are concerned about have not been satisfactorily resolved.
How can I use gifts to reduce my estate’s liability for inheritance tax?
There are 5 main types of gifts you can make during your lifetime that can reduce your estates liability for inheritance tax:
Spousal gifts – Gifts between spouses or civil partners are normally except from inheritance tax. There is usually no limit on spousal gifts, as long as your spouse lives in the UK.
Annual gifts – You can give gifts up to a value of £3,000 each year that will not then be considered part of your estate for inheritance tax purposes. These gifts can be cash or any other assets and this allowance can cover a single gift or multiple smaller gifts.
Exempted gifts – This includes small gifts, such as Christmas and birthday gifts, charitable giving and political donations, contributions towards another person’s cost of living and wedding or civil ceremony gifts up to £1,000 (£5,000 for your child or £2,500 for a grand-child or great-grandchild). It also includes gifts that are considered to be part of your normal expenditure. If you make gifts of money out of your income, so out of your salary or pension, these gifts will be free of inheritance tax.
Non-exempted gifts – Other types of gifts will normally be liable for inheritance tax, depending on how long they are made before you pass away. The rate of tax that will need to be paid will depend on exactly how long before your death the gift was made.
Where the time between the gift and date of death is:
Less than 3 years – the full 40% tax rate will apply
3-4 years – a 32% rate applies
4-5 years – a 24% rate applies
5-6 years – an 16% rate applies
6-7 years – an 8% rate applies
7 years or more – no inheritance tax will be liable
It’s important to note that if you sell your home to someone, such as your child, for less than its true market value, the difference can also be considered a gift for tax purposes.
You can also no longer receive any benefit from the gift after it is made e.g. if you give your house to your child, you can no longer continue to live in it unless you pay a market rate of rent.
Why should I use Jobling Gowler for my Will, probate and/or tax planning?
- We provide a friendly, sensitive but pragmatic approach to help make it as easy as possible for you to deal with these important issues.
- We have many years of experience across all areas of Wills, probate and tax planning, meaning we can offer the very best solutions for you and your estate.
- Our team includes several members of the Society of Trusts and Estate Practitioners (STEP).
- We have particular expertise and experience in advising vulnerable clients in all areas of Wills and estate planning, as well as in relation to Lasting Powers of Attorney, Court of Protection deputyship and care fee planning.
- Jobling Gowler is Lexcel accredited by the Law Society reflecting the high standards we achieve in practice management and client care.