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Dying without a Will is a taxman’s dream and a family’s nightmare

It’s a stark message from no less a body than the Law Society – the representative body for solicitors – which has conducted research that shows the majority of Britons don’t have a Will. The Family Building Society can help.

The consequences of not having a Will and dying intestate are far-reaching, can be extremely damaging to your estate and give unnecessary amounts of money to the taxman.

Image of a post it note with the words Make A Will

The research revealed that 73 per cent of 16-24 year olds don’t have a Will – we are amazed that 27 per cent do! But, perhaps rather more importantly, only 64 per cent of people over the age of 55 have made their after death wishes clear. It also showed that men are more likely to have a Will and keep it updated than women.

In 2014, the last year the figures were available, £8m went to the Government directly, not as tax, but because people died intestate (without making a Will) and there was no one to claim it.

According to the research, 23 per cent of respondents wrongly believed that without a Will, their possessions would automatically go to their family.

It is estimated that by 2018 the government will receive nearly £6bn from Inheritance Tax.
Yet with careful planning, those with a will can substantially reduce the amount of Inheritance Tax that becomes liable or even alleviate it all together. Inheritance Tax can be a lot higher without a Will.

The really bad news is that children, grandchildren or great-grandchildren may not inherit and if there are dependent elderly relatives involved, they too may miss out on the financial resource they need to continue their care. Step-children may end up benefiting whilst biological children miss out.

Yet the best advice, according to the Family Building Society’s partners in probate and estate planning specialists Kings Court Trust, is to make a Will and not die intestate in the first place.

“In 2014 there were some interesting changes to the law and the rules of intestacy have certainly been simplified. The biggest change is that if there is a surviving spouse and there are no children or other descendants they will inherit all the estate. Previously we would have had to account for parents and/or brothers and sisters and so on if the estate was worth over £450,000,” says Rob Hannan at Kings Court Trust.

The changes were introduced by the Government with the objective of simplifying the system and give faster access to estates to surviving relatives.

Where there are children or other descendants, the old rules used to give a spouse or civil partner, £250,000 of the estate and the remainder was split into two.  One half went to the children or other descendants and the other half was held in trust from which the spouse was entitled to the income generated by the estate during their life, and on their death this half passed to the children.

But now, the half previously held in trust will pass directly to the spouse so they will inherit this fully and the children/descendants will lose their entitlement to this part. This means that relatives such as parents or siblings will miss out, where there is a surviving spouse.
 
As was always the case, unmarried partners will get nothing.

“Dying intestate means you completely lose control of what you want to happen after your death,” says Hannan.

“In the case, say, where there is a second wife, who perhaps has an independent income herself, and there are elderly dependent parents - the relatives would miss out”.

So, where there is a Will, there is a way.

To find out more about making a will http://bit.ly/294cFjL

 Steve McDowell

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