Thackray Williams

Why make a Will?
According to the financial advice website unbiased.co.uk, 57 per cent of adults die without making a Will.  The most common reasons cited include ‘never getting round to it’, ‘complicated family situation’, and one in ten also stating that the cost deterred them.  However, the preparation of a Will now to clearly set out your intentions can avoid difficulties and expense in the future, where the family of those who choose the DIY route can find that even small mistakes can lead to big problems in the administration of an estate.

If you die without leaving a valid Will then a set of provisions called the Intestacy Rules apply which determine what happens to the distribution of your assets, which may not necessarily be what you intended or meet with your family’s expectations.  A surviving spouse is only entitled to the first £250,000 unconditionally if you have children.  When your property alone may well exceed this figure, and where unmarried couples do not automatically receive the same rights as married couples, the requirement for a Will has become increasingly important.

Common mistakes and misconceptions
It is recommended that professional advice is sought before any steps are taken to prepare a Will or attempt to remove assets in order to reduce a potential Inheritance Tax liability.

A few common examples include; failing to sign the Will or have it witnessed correctly; a beneficiary acting as witness; making invalid amendments to the Will; failing to clearly set out their intentions; and even placing it where nobody can find it.

In all these examples money from your estate can be unnecessarily frittered away on legal expenses to reconcile these issues, which could have been avoided by having a simple Will made in the first instance.

Gifts
There are simple methods of lifetime tax planning that are exempt from Inheritance Tax because of the type of gift or the reason for making it, and these include:

• An annual exemption of £3,000 capital in each tax year can be made without being brought into account for Inheritance Tax purposes.  This can also be brought forward for one year if unused.

• Wedding gifts up to £5,000 depending on the relationship to the person getting married

• Small gifts of up to £250 to as many people as you like in any one tax year (but you cannot give a larger sum or combine the gift with an annual allowance or wedding / civil partnership ceremony gift exemption).

• “Regular expenditure out of normal income” gifts can be made free of inheritance tax if regular payments by way of gift can be shown to be paid from income without reducing the donor’s ability to maintain his or her usual standard of living.

You can make larger gifts to individuals which will be exempt from Inheritance Tax if you live for seven years after you make the gift.  You can set up a intrust, in your lifetime but specialist advice would need to be sought to avoid tax traps

For more information contact Anthony Macey on 020 8290 0440 or email: anthony.macey@thackraywilliams.com