Author: Jenna Dunstall

What happens if I do not make a Will?

It is so important to have a Will in place to ensure that your estate passes to the people that you want it to go to.

Some people wrongly assume that if they do not have a Will their estate will pass to the Crown, however this is not always the case. There are rules dictated by law, known as the Intestacy Rules, and these rules set out who should inherit your estate if you do not have a Will.

If you are married/in a Civil Partnership and have children:

If your estate is worth less than £250,000 then your spouse will inherit everything.

If your estate is worth more than £250,000 then your spouse will inherit all of your personal belongings, the first £250,000 of the estate and half of the remaining estate.  The other half of the remainder will pass to the children equally.

If there are no children then your spouse would inherit the entire estate.

If there is no spouse then the order for those in line to inherit is as follows:

1. Children (if any have predeceased, then their children will take their share i.e. the deceased’s grandchildren)
2. Parents
3. Siblings (if any have predeceased, then their children will take their share)
4. Half-siblings
5. Grandparents
6. Aunts and Uncles (if any have predeceased, then their children will take their share)
7. The Crown

It is worth noting that if your estate is worth more than £250,000 and you are married with children, that your spouse will not inherit everything, which most people probably would not intend to happen and this is not always the best outcome from an Inheritance Tax planning point of view.

You will see that the Crown will only inherit if you have no surviving blood relatives.

People that cannot inherit under the Intestacy Rules include carers, friends, partners (unmarried/not in civil partnership) and relations via marriage such as a brother-in-law.

It is therefore imperative that you have a Will in place stating exactly what you want to happen to your assets on your death, as the Intestacy Rules can sometimes have unintended consequences.

Should you wish to discuss your own personal situation with us then please do not hesitate to get in touch.

How can I mitigate my potential Inheritance Tax bill on my death?

This is a question that many people ask and inheritance tax planning is very important. Knowing your options could make a massive difference to any potential Inheritance Tax bill on your death.

The most common way to mitigate Inheritance Tax is to gift your assets to your beneficiaries whilst you are still alive, thus reducing your estate for Inheritance Tax purposes. However, if you gift a large sum of money or high-value asset, then you must survive seven years from the date of the gift in order for the value of the gift to no longer form part of your estate for Inheritance Tax. It is important to remember that whatever gift you give away, that it is a genuine gift and that you do not retain any kind of benefit from the assets given away, otherwise no matter how long you survive after the gift it may still form part of your estate for Inheritance Tax. An example of this would be a parent transferring their property into the names of their children, but continue to live there free of charge. This is a gift with reservation of benefit and the value of the property would still form part of the estate of the parent even after seven years. One way around this in this scenario would be for the parent to pay the market rent to the children to live there and then the gift is genuine, as they are not living there for free as though it is still their asset.

There are other gifts that can be given that do not require the donor to survive seven years. You may use your annual gift allowance, which is a total of £3,000 per financial year. You may also go back and use the previous year’s allowance if you did not use it, for example, if you did not give any gifts in the last financial year (2015/2016) then in this current financial year you could gift up to £6,000 as an individual, or £12,000 as a couple. You may, however, only go back one year to use any unused gift allowance.

If you receive an income which exceeds your outgoings to maintain your standard of living, then you may also give regular gifts out of income. In this case, you must have the intention of giving away income regularly and retain enough income to meet your own needs without reducing your standard of living or having to resort to spending capital in order to maintain your standard of living. It is important that you keep good records of income and outgoings and gifts given, as your Executors will have to provide evidence of this on your death. This does not really reduce the value of your estate, but it helps at least to minimise the increase.

It is also possible to gift £250 to any one person in a tax year (as long as you haven’t used another exemption on the same person) and in addition to that, you can give gifts in consideration of marriage, for example, a parent can gift £5,000, a grandparent can gift £2,500 and gifts of up to £1,000 can be given from others.

These options are legitimate ways to reduce your estate or at least minimise the increase.

It is important to remember that when you give a gift, it then belongs to the person receiving it and if they later divorce or become bankrupt for example, then those assets that you gave them would form part of their estate during those proceedings. You cannot control the assets once given away.

Have any questions? Leave a comment below…

Unfortunately, BLegal ceased trading earlier this year. They had various offices and when these closed, most of the documents that they held for clients, such as wills, powers of attorney and deeds, in storage came over to us to look after on an ongoing basis. BLegal were also holding documents held by Fendom Dawson, Coopers and Baily Gibson and these documents will now also be with us. We will continue to store these documents safely here at Aston Bond in Slough.

If you were a client of any of these firms and wish to discuss any legal matter, then please do not hesitate to contact us and we shall be pleased to assist.

If your Will was stored by any of these firms, and you have appointed them as your Executors, then it is very important that you review the terms of your Will, as this appointment will fail and could have unintended consequences.

If you wish to appoint this firm in place of these firms that no longer exist, then we will be happy to prepare a free Codicil for you to appoint this firm in their place.  Should you wish to take advantage of this: then please do not hesitate to contact ;

01753 486777

Have any questions? Leave a comment below…

When someone dies and they have substantial assets, a Grant of Probate is required to be obtained.  A Grant of Probate (also referred to as Grant of Representation) is merely a court stamped document which names the personal representatives of the estate.  Financial institutions will not release the deceased’s funds for distribution until they have had sight of a Grant and can rest assured that they are paying the monies to the correct person/people.  A Grant is not always required, for example, if the deceased owned all their assets jointly with another person or they did not own any property, had no stocks or shares, but had various bank accounts with different banks, although each account held less than about £15,000, then the banks would usually just require a form to be completed and signed in front of a solicitor for the funds to be released.  Every bank has its own rules about what amount it will release without the Grant and they will let you know what their requirements are once they are informed of the death. Continue reading “What is Probate? And how long can I expect it to take?”