“In this world nothing is certain but death and taxes” said Benjamin Franklin – over two centuries later this holds as true.
Whether we approve of it or not, Inheritance Tax is here to stay for the foreseeable future but whereas in the past it only affected the estates of those at least moderately wealthy, now with UK average house prices approaching £300,000 and London average property prices at over £500,000 even after the latest price hiatus, Inheritance Tax applies to the majority of homeowner’s estates.
As a general principle, if you want to pay Inheritance Tax, then don’t write a Will. It’s the best and fastest way to ensure that you make the maximum contribution to government coffers when you die. If, on the other hand, you would like to pass the maximum amount of your estate to family and friends, plan ahead and make a valid and up to date Will.
Nor can you rely on a Will made some years ago – tax legislation has been changing and increasing estate liabilities at a pace not seen since the modern legislative format and it is imperative that you review your Will regularly to avoid unnecessary tax traps.
What risks are you running by not making a Will? Parents with children under 18 MUST appoint GUARDIANS – this is IMPORTANT FOR ALL PARENTS!
Dying without a Will (Intestate) means that your estate will pass in accordance with the Administration of Estates Act 1925 and the Inheritance (Trustee Powers) Act 2014 – and that covers your property, your personal possessions and savings. Spouses and children do not automatically receive everything in the deceased’s estate.
There is a strict pecking order under the Act for deciding who gets what. Spouses get a rough treatment by the intestacy rules.
The Deceased leaves a spouse but no children so the spouse receives:
The Deceased leaves a spouse and children, the spouse receives:
Now imagine how this can lead to problems, here are just a few of the major ones:
Failure to make a Will can have disastrous consequences for the family wealth, relationships and liabilities. It leaves far too much to chance and the only likely smile will be on the face of the Chancellor of the Exchequer!