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Wed 8th September, 2010
News
Will Power! |
7th January 2008 |
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During the course of buying your home you should think about making a will.
If you die without a will your property may be sold according to rules laid down by the government and the common law, called the “Intestacy” rules. In the worst case scenario, as a result of not having a valid will your loved ones could be left homeless.
When you buy your property your solicitor will nearly always advise you to make a will. Yet surprisingly only approximately 1 in 3 of the population have made a will and even fewer have kept their will up to date.
Confronting mortality is not something we are naturally comfortable with, however everyone should make proper arrangements to ensure that their financial affairs (including any property) are left in good order after their death.
With the taboo attached to making a will most people presume their loved ones including partners will automatically inherit their property and other assets. This may not be so. In order to be safe and to protect your wishes you should make a will.
What is a will?
A will is a legally binding document in which you direct to whom your property and other assets (called your “legal estate”) are to go after your death. If you do not have a will you do not have a say as to who inherits your legal estate. In those circumstances, the rules of intestacy will dictate how your assets are divided.
A will also records your instructions after death. You can choose your executors. These are individuals who you trust to distribute your legal estate in accordance with your wishes. Executors are sometimes family members but often solicitors so the burden of dealing with your legal estate falls upon a professional and not someone close to you.
If you have children, your will can name the legal guardians and make financial arrangements for them.
Your will can also provide for any specific funeral arrangements.
If the total value of your legal estate exceeds the current inheritance tax threshold of £300,000 your legal estate may be diminished by inheritance tax at the rate of 40%. By preparing a will there are ways you can minimise the amount of tax to be paid.
What happens if you don’t have a will and …..
· you have purchased your property alone?
If you die without making a will you are declared “intestate” and your assets including your property will be divided by an administrator in accordance with the intestacy rules. Without a will your wishes will not be known and there may be burdensome inheritance tax duties to pay.
· you have purchased your property with a co-purchaser?
If you jointly purchase a property prior to completion your solicitor will ask you to confirm how you wish to hold your porperty. This will usually determine how the property is to be passed on the first death.
If you purchase your property with one or more people, it is necessary to decide whether the property should be owned as ”joint tenants’ or as “tenants in common”. These expressions have nothing to do with tenancies but are simply the technical expressions used to describe the two different ways of owning property jointly.
· Joint Tenancy
If you decide to own a property as joint tenants the effect is that each owner will have an equal share in the property, and upon the first death the share of the deceased owner automatically passes to the other regardless of the effects of not having a will or the terms of any will made by you.
· Tenancy in Common
If you decide to own a property as tenants in common, it is possible to provide for the owners to have unequal shares in the property, and the share of any deceased owner will be dealt with under the terms of his or her will or the intestacy provisions if there is no will.
The decision as to which method of ownership is to be adopted will depend on your individual circumstances.
· If you are not married or in a civil partnership
Most joint owners who are not married or in a civil partnership (i.e. co-habiting couples, friends buying together or business partners) will normally hold as tenants in common.
In all cases where property is held as tenants in common it is desirable to make a will to deal with your share of the property. Do not presume that by virtue of living with someone that they will be automatically entitled to your property after death unless you have made your intentions clear in your will.
If you do get married in the future you will have to make a new will as marriage automatically revokes any existing will
· If you are married or in a civil partnership
It is more common for husbands and wives or civil partners who own property jointly to hold as joint tenants. A joint tenancy is often more appropriate as most couples want the survivor of the two of them to automatically own the whole property after the first death whether or not a will is in place.
How to make a will?
Although wills can be perfectly valid if purchased off the shelf from a retailer or legal stationer, there is no substitute for professional advice based upon your individual circumstances. A professional can assist you in organising your estate effectively with tax planning in mind so that you only pay as little Inheritance Tax as possible. You cannot achieve this using a standard off the shelf will. A solicitor will often provide a will drafting service for a fixed fee agreed in advance.
It is never a pleasant thing to think about but by preparing a will you can ensure that your loved ones are not left with unnecessary problems at a difficult time.
For further information, please do not hesitate to contact Miss Louise Hannington, at Lawcomm Solicitors, Unit 2, Victory Park, Whiteley PO15 7FN Tel: (01489)864100 E-mail: louise.hannington@lawcomm.co.uk
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