Making A Will

Article by Peter Brown and Guy Greenhous

Originally Published in June 2003

INHERITANCE TAX

Will any inheritance tax be payable on your†estate on your death?

Anything passing to your spouse is free of†inheritance tax. This does not apply to unmarried†partners.

Anything you leave to charity is also free of†inheritance tax. There are a number of other†inheritance tax exemptions e.g. for business or†agricultural assets.

However, if none of these apply, then it is†necessary to calculate the value of your estate for†inheritance tax purposes. This will include not†only what you own in your own right, whether†by yourself or jointly, but will also be affected by†any gifts made during the seven years before†your death and possibly by any interest you may†have in a trust.

At current rates, inheritance tax is charged at†40%on the value of your estate, having†discounted the threshold known as the nil rate†band on which no tax is payable. The value of†the nil rate band changes from year to year: for†2003/04 it is £255,000.

If the inheritance tax payable on your death is†likely to be significant, you may wish to consider†whether this can be mitigated. With careful†planning, tailored to individual circumstances,†substantial tax savings can be achieved.

ENDURING POWERS OF ATTORNEY

What is an Enduring Power of Attorney?

An Enduring Power of Attorney allows you to†provide a structure to deal with your financial†affairs should you become incapable of dealing†with them yourself as a result of illness or†accident.

When should I make one?

An Enduring Power of Attorney can have†immediate effect as a normal power of attorney.†However, it is possible to include a restriction so†that it does not come into force until it needs to.†

If you become incapable of dealing with your†own financial affairs and an Enduring Power of†Attorney has not been signed, a Receiver will†have to be appointed to deal with your affairs.†This is a more complex, costly and lengthy†procedure involving an application to the Court†which can and should be avoided.†

MAKING A WILL

Where do I start?

Making a will ensures that you make an†informed and reasoned decision as to†how you wish to provide for your family,†relatives and friends following your death.†In the absence of a will, detailed rules on†inheritance apply and they may be wholly†inappropriate in your case.

For instance, many people assume that if they†die without a will their spouse or partner will†inherit everything but...

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