Bookmark:  Bookmark to del.icio.us     Follow invidion on Twitter
 

Wills and Intestacy

 
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the transfer of his or her property at death. If no will is made, the laws of intestacy will be applied. It is always a good idea to make a will, even if you are still reasonably young, for the following reasons:
 
  • You have control over how your assets are shared. If not, the laws of intestacy will decide for you.
  • If you are unmarried, you can ensure that your partner or children are provided for.
  • If you are seperated or divorced, you have the choice about whether to leave any assets to a former partner (especially if you have children from that relationship).
  • It is also possible to use a will to set up a Trust, especially if the beneficiaries of the will are young and unable to manage large sums of money.
  • You can ensure that you don't may any more Inheritance Tax than you need to.
 
Any person over the age of majority [18] and of sound mind can draft his or her own will without the aid of a solicitor or will writer, although in most cases using such a professional is highly recommended.
 
A will does not need to be complicated. All it needs to state is:
 
  • Who you want to benefit from your will.
  • How any children under the age of eighteen (or even young adults still in full-time education) will be provided for financially.
  • Who will administer your affairs and carry out the instructions in the will after your death. This person is known as the executor.
 
It is also important to review your will on a regular basis, usually when a major life event occurs; usually upon marriage, the birth of a child, when you purchase a house, divorce or seperation.
 

Probate

 
After the testator has died, a grant of probate is required. The will should name an executor (or executors) who will be responsible for collecting together all the money and assets of the estate, as well as paying off any debts (including unpaid taxes or any Inheritance Tax that falls upon the estate). A grant of probate gives the executor authority to approach organisations such as Insurance Companies and ask them to release funds (i.e. if the deceased has life insurance cover and a claim needs to be made). Similarly, investments may need to be liquidated or transferred to a beneficiary, or Property and Land may need to be sold or transfered. It is the task of the executor to do this. If no executor has been named, the probate registry will issue a 'Grant of Letters of Administration' (or if you live in Scotland, this is known as a 'Grant of Confirmation').
 
In England and Wales, marriage will automatically revoke a will as it is presumed that upon marriage, a testator will want to review the will. A statement in a will that it is made in contemplation of forthcoming marriage to a named person will override this. Divorce, conversely, will not revoke a will, but will have the effect that the former spouse is treated as if they had died before the testator and so will not benefit. Where a will has been accidentally destroyed, on evidence that this is the case, a copy will or draft will may be admitted to probate.
 
Once a will is made, it should be kept in a safe place, and the executor should have access to it. If a solicitor or will-writer drafts a will for you, they will usually retain the original in a safe place and issue you a copy.
 

Instestacy

 
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of his or her enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies to part of the estate, the remaining estate forms the 'Intestate Estate'.
 
Where a person dies without leaving a will, the rules of succession of the person's place of habitual residence or of their domicile apply. In England and Wales the rules of succession are the Intestacy Rules set out in the Administration of Estates Act and associated legislation.
 
The Act sets out the order for distribution of property in the estate of the deceased. For persons with surviving children and a wealth below a certain threshold (£250,000 as from February 2009), the whole of the estate will pass to the deceased's spouse or, from late 2005, their registered civil partner. For persons with no surviving children but surviving close relatives (e.g. siblings or parents), the first £450,000 goes to the spouse or partner (as from February 2009). Such transfers below the threshold are exempt from UK Inheritance tax.
 
In larger estates, the spouse will not receive the entire estate where the deceased left other blood relatives and left no will. They will receive:
 
  • all property passing to them by survivorship (such as the deceased's share in the jointly owned family home);
  • all property passing to them under the terms of a trust (such as a life insurance policy);
  • a statutory legacy of a fixed sum (being a larger sum where the deceased left no children); and
  • a life interest in half of the remaining estate.
 
The children (or more distant relatives if there are no children) of the deceased will be entitled to half of the estate remaining immediately and the remaining half on the death of the surviving spouse. Where no beneficiaries can be traced, the rules of Bona vacantia apply. This is a common law doctrine in the United Kingdom under which ownerless property passes by law to the Crown.
 
In Scotland, different intestacy rules apply. The law provides firstly for the surviving spouse or civil partner, under a system known as 'prior rights'. Currently the spouse or civil partner will inherit a home up to the value of £300,000, and there is a scale for other assets. If there is no spouse or civil partner, assets will pass to the following individuals in the following order:
 
  • Children, or their descendants (meaning their children or grandchildren)
  • If their are no children or their descendants, half to brothers and sisters and half to parents
  • If none of the above, then to aunts and uncles
  • If none of the above, then to Grandparents
  • If none of the above, then to great-aunts or great-uncles or their descendants
 
If you have not made a will, you should consider making one as soon as possible.
 
NOTE: This document is intended to provide a brief overview of the subject.
 
 
 

If you use this site regularly, please help us to keep it running.

Click here to find out why we need your support.
 

Are you retiring soon ?

If you have any private pension plans, you are under no obligation to accept an annuity offered by your current pension provider.

In many cases you may be able to secure up to 40% more income each year by shopping around.

Click here to begin your search for a better deal.

 www.thinkannuity.co.uk

 

Personal Finance Headlines

Church of England collection plates pass into the digital era
06/23/2017 08:34 PM

Sunday service to accept donations using contactless cards

Weekend catchup — this week’s personal finance headlines
06/23/2017 05:14 PM

China stocks, IHT record, interest rates clash

Inflation — how to protect your finances
06/23/2017 05:13 PM

Download this week’s FT Money Show podcast