Not Made A Will?

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 at £200,000 and London average property prices at over £300,000, 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?

Dying without a Will (Intestate) means that your estate will pass in accordance with the Administration of Estates Act 1925 - 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.

Examples:

The Deceased leaves a spouse but no children so the spouse receives:

All the personal chattels - such a furniture, jewellery, car, pictures etc

A legacy of £200,000 and one half of the balance outright

The remaining balance then passes to various relatives according to who has survived; first to the deceased's parents but if not surviving then equally to surviving brothers and sisters.

The Deceased leaves a spouse and children, the spouse receives:

All the personal chattels

A legacy of £125,000 and the income from one half of the balance

The rest passes to the children when they reach 18

Now imagine how this can lead...