Last Will And Testament FAQ United Kingdom
If you are getting older or if you have dependants, there are three documents you should prepare to help your loved ones manage your affairs.
A Will enables you to:
If you die without a Will, your property will be distributed by a court-appointed administrator according to statutory rules for "intestate succession." Your property will be divided among your surviving spouse, children, and possibly other relatives in whatever manner the law of your jurisdiction specifies. You will not have a chance to give property to non-relatives or to exclude relatives. Additionally, if you have no relatives, your property will go to the state rather than to a friend or charity of your choice.
In most jurisdictions you must be at least 18 years old to make a Will, however exceptions may be made for younger people if they are in the military, if they are married or if they have been legally emancipated. In addition you must be of "sound mind" to make a Will. Being of sound mind means:
It is up to you to decide when to change your Will. You should review your Will from time to time to ensure that it still meets your needs and that your property will be distributed according to your wishes. It is especially important to review your Will on the following events:
A codicil is an amendment to your Will. A codicil is used when you are happy with the contents of your Will but want to make minor changes. It leaves your original Will intact but makes specific changes, such as adding or deleting a beneficiary. A codicil is signed and witnessed (executed) in the same manner as a Will.
For more information: See Using a Codicil to Change Your Will.
Yes: a power of attorney for financial matters provides your chosen agent with the power and authority to deal with your property and make financial decisions for you only while you are alive. A power of attorney automatically ends on your death. Consequently, you need a Will to specify how you want your estate distributed on your death.
A Last Will is used to distribute your property after your death. A Health Care Directive allows you to specify, in writing, your health care preferences for the time when you no longer have capacity to provide consent. A Last Will cannot be used to specify what type of medical treatment you want.
LawDepot's Health Care Directive includes both a Living Will and a Medical Power of Attorney. A Living Will allows you to convey your wishes regarding medical treatment when those wishes can no longer be personally communicated. A Medical Power of Attorney allows you to designate someone to make health care decisions for you when you are unable to make decisions for yourself. Neither of these documents can be used to dispose of your property.
Joint ownership (also called "joint tenancy") is different from other types of co-ownership. If you own property jointly with someone else, it means that both of you own all of the property. (In other kinds of co-ownership each of you owns half of the property.) Jointly owned property automatically becomes the property of the surviving owner when one of the owners dies. A typical example of jointly-owned property is where a husband and wife jointly-own their house. In that case, when one spouse dies, full title to the house automatically goes to the surviving spouse.
A testator is the person who is making the will. A female testator is often referred to as a testatrix.
A beneficiary is a party who is receiving a gift from the testator. Beneficiaries can be people or organisations.
A devisee is a party who is receiving a gift of real estate from the testator.
An executor is the person who will be carrying out the terms of the testator’s will and administering the testator’s estate. An executor is sometimes referred to as a personal representative.
An executor or personal representative is responsible for collecting the assets of the testator's estate, paying any debts of the estate, paying any applicable taxes, and distributing the assets of the estate in accordance with the directions of the Will.
Administering the estate can be complex, time-consuming and stressful. Ensure you select someone you trust, who will be able to handle your financial matters prudently. Your executor does not need to have any legal expertise. An executor can always hire a solicitor should the need arise. Many people select their spouse or an adult child to be their executor. Also, people often choose an individual who will be receiving a substantial amount of property to be their executor. In this way, the executor will want to ensure that the property is distributed properly.
Typically you may choose anyone to act as executor except a minor. An Executor can be disqualified if they have been convicted of a crime. Additionally, some jurisdictions place restrictions on non-resident executors (for example, some states specify that all non-resident executors must be related to you).
Yes, your executor can be a beneficiary in your Will.
A Joint Will (also known as a Mutual Will) is a single Will that covers two people. When one person dies the Joint Will leaves everything to the surviving person. Joint Wills also state what will happen to any property should both people die.
The major problem with Joint Wills is that the surviving person cannot change the Will after the first person dies. Should life circumstances change - for example the surviving person wishes to remarry after the first person's death - the surviving person is stuck with whatever the Joint Will provided. LawDepot does not provide Joint Wills however, LawDepot does allow two people to make "Mirror" Wills.
Mirror wills are used to allow two people to create almost identical wills which leave everything to each other. A husband and wife (or any other couple) can make "Mirror" Wills by each writing a Will that leaves everything to the remaining spouse. Often, there is a clause that provides that if the husband and wife die at the same time or within thirty days of each other, then everything goes to the couples' children or if there are no children, to a named beneficiary.
The important thing to remember is that you can only use a Will to give away what you own, and not what your spouse owns. Additionally, jointly owned property where there is a right of survivorship cannot be disposed of in your Will because the surviving owner automatically becomes the sole owner of the property when one of the joint owners dies. This is true whether it is a house, a bank account or any other property that is jointly owned.
If you want to make Mirror Wills, each partner must create a Will. Use the "Specific Gifts" section to give gifts to named beneficiaries and then the "Distribution of Residue" section to give everything else you own to your partner. If you do not want to give specific gifts to anyone, select "None" for Specific Gifts and leave the residue of your estate to the other partner.
In most jurisdictions, if you get married, any previous Will that you made is revoked unless the Will was made in contemplation of marriage and that fact is expressed somewhere in the Will. If you want to make a Will in contemplation of marriage, make a Will and use the Additional Provisions section to say "This Will was made in contemplation of marriage to my fiancé, ________."
Depending on the jurisdiction in which you reside, a divorce may revoke your previously made will. In some jurisdictions your entire will is revoked upon divorce. In other jurisdictions a divorce may have no effect on your will or only specific provisions relating to your former spouse will be revoked.
A civil partnership is the legal relationship that exists when a same-sex couple registers their partnership in accordance with the Civil Partnership Act 2004. Civil partnerships are a new legal relationship. They are distinct from marriage in that they are exclusively for same-sex couples. The new legal relationship is intended to grant same-sex couples the same rights and responsibilities as married opposite-sex couples.
Often a couple who is living together without formally getting married will refer to their relationship as a common-law marriage. However, common-law marriages are no longer legally recognised as marriages in the United Kingdom. Cohabitating couples have fewer rights and responsibilities than their counterparts who are married or in a civil partnership. Should one of the partners die, the other partner will not automatically inherit the deceased’s property. It is therefore especially important that common-law couples clearly specify their intentions in a will.
Stepchildren are not your natural heirs unless you have legally adopted them. They are not included if you leave property to "all my children". If you want to leave something to your stepchildren, you must name them as beneficiaries in your Will.
You must list ALL children. Any child not specifically named in your Will may have the right to claim against your Will as if no Will had been created. If you need to disinherit a child you should do so by naming and disinheriting that child specifically. Otherwise, if you simply leave out a child, a court may assume that you made a mistake and may re-interpret the Will including the missing child.
A guardian is a person the testator appoints to look after the testator’s minor children when the testator dies.
You do not have to appoint a guardian for your minor children however, if you do not, the courts will decide who will look after your children if no other person having parental rights survives you.
When appointing a guardian you may want to consider the following questions:
For more information see: Naming a Guardian for Your Children
You may want to consider the following assets when valuing your estate:
You may want to consider the following liabilities when valuing your estate:
Life insurance payouts will form part of your estate unless they are written in trust. It is a good idea to have your life insurance payouts go into trust rather than a beneficiary because such payouts will not be assessed as part of your estate for inheritance tax purposes.
State, private and company pensions are considered to be outside your estate and they will not be taxed.
A specific gift is just what it sounds like. It is a gift of a specific item of property or sum of money to a named beneficiary. For example:
Everything that is not given away as a specific gift forms the residue of the estate.
The residue of the estate is all of your property that is not used to pay your debts or given as a specific gift.
For example, if you own a house, household items such as furniture and jewellery, a car and a savings account, and you give your car to your son, and your jewellery to your daughter, your house, all other household items, and your savings account will be the residue of your estate. If you give the residue to your spouse, your spouse will get your house, your household items (less the jewellery) and your savings account.
Remember, your executor has to pay debts before the residue of your estate is distributed. So if you had £25,000.00 in savings and £10,000.00 in debt, your executor would have to pay the £10,000.00 debt before distributing the residue. Debts are usually payable out of the residue first, and if there is not enough money from the residue, then specific gifts will be sold for cash to pay debts.
Please note that your spouse, your ex-spouse, someone you are cohabiting with and your children may be entitled to portions of your estate notwithstanding the provisions of your Will. If you are unsure as to your obligations, consult a local solicitor.
An absolute gift is a gift of property that gives the recipient complete possession and control over the property. Upon receipt of the gift, the recipient owns the property and may do whatever he/she wants with it, subject, of course, to legal regulation for the use of the property.
A conditional gift is a gift of property which is revocable if the recipient does not fulfill conditions attached to the gift. For example: "I give my house to my friend John, provided that my friend John take care of whatever cats I own on my death for as long as the cats shall live."
Law Depot's Will provides for absolute gifts in both the Specific Gifts section and the Distribution of Residue section. You may use the Additional Provisions feature to give a conditional gift, but the law surrounding conditional gifts is complex, and you should probably seek legal advice in your jurisdiction to properly effect a conditional gift.
It is the job of the executor to pay outstanding debts out of the assets of the estate. However, if any land (real property) is given as a gift, and has a mortgage attached to it, then that beneficiary (devisee) receives the land subject to the mortgage. The executor will not pay the outstanding mortgage out of the assets of the estate. This clause is a direction for the executor to protect other beneficiaries.
If a beneficiary (devisee) receives the whole estate or has other assets, they are entitled to pay the mortgage themselves.
A person leaves their entire estate to their spouse (a home with a mortgage plus a bank account). In this case, this clause has no effect. The home and bank account go to the surviving spouse. This clause does NOT mean that the surviving spouse cannot spend the cash portion of the estate to pay off the mortgage. Of course they can. Once the estate is settled, a beneficiary can do whatever they want with a gift.
The purpose of this clause is to help protect against the following situation: A mother owns 300,000 in equity in a house and 300,000 in a bank account. The mother wants to give equal value to each of two sons. The mother gives “my home to son #1” and “my bank account to son #2”. But the house has a total value of 500,000 with an outstanding mortgage of 200,000. The mistaken executor decides to pay off the debts of the estate (the mortgage) before distributing the gifts. Son #1 will get a 500,000 debt-free house and son #2 only gets 100,000 – the remainder of the bank account. Clearly not what the mother intended.
Yes, you can make a gift to a charitable organisation. To make a specific gift to a charity ensure that you provide the full name of the charity and for “Beneficiary’s Gender” select “Corporate”. Under “Beneficiary Address” provide the full address of the charity’s main office. Also, it is a good idea to provide an alternative beneficiary to a charitable gift in case the charity folds or no longer exists at the time of your death.
Inheritance tax (IHT) is a tax that is paid on someone's death if the estate they left behind is worth more than a threshold set by HM Revenue & Customs. As of April 2008 the threshold amount was £325,000.
You will be taxed 40% on any amount exceeding the threshold amount.
Nil rate band refers to the amount of an estate on which there is no tax to pay. If the value of an estate, including any assets held in trust and gifts made within seven years of death, falls within the nil-rate band there will be no IHT payable on the estate. Where the value of an estate exceeds the nil-rate band, only the amount above the nil-rate band is taxed at 40%.
Throughout your life, you can give “exempt” gifts to lower the value of your estate. If your estate is lower than the threshold amount, then your estate will not be subjected to IHT.
During your life you can make certain gifts that will not be subject to IHT. Once these gifts have been made, they will no longer be considered part of your estate. The following gifts can be deducted from the estate before it is taxed:
Yes. When you die, any assets left to your spouse or registered civil partner (provided they’re UK-domiciled) are exempt from IHT. Additionally, your partner’s IHT allowance is increased by the amount you didn’t leave to others, meaning together a couple can currently leave up to £650,000 tax-free.
Life insurance payouts will be taxed unless they are written in trust. It is a good idea to have your life insurance payouts go into trust rather than a beneficiary because such payouts will not be assessed as part of your estate for inheritance tax purposes.
State, private and company pensions will not be assessed as part of your estate for income tax purposes.
You can find out more at: http://www.hmrc.gov.uk/cto/customerguide/page1.htm
You should not name your pets as beneficiaries. Instead you should provide instructions to your executor to find suitable care for your pets and leave money for the pets’ upkeep.
Where possible, you should discuss your concerns with trusted friends and family. Ideally, you should leave spare house keys with trusted acquaintances. You should also consider carrying an information card in your wallet to alert emergency medical personnel. This card should contain contact information for pet caregivers as well as any important medical information pertaining to your pets.
You can include your wishes for your funeral in your Will. However, your expressed wishes are not binding, and there is a good possibility no one will look at your Will until after your funeral. If you do put directions for your funeral in your Will, make sure your executor and family members who will be arranging your funeral know that you have done so. You can use the Additional Clauses section to specify your funeral instructions.
The Additional Clauses section allows you to add up to four clauses to your Will. You can use this section to add specific gifts, to give conditional gifts or to express your non-binding wishes about some matter.
An “international will” is a Will that has been prepared according to the rules regarding international Wills set out in the Washington Convention of 1973. When a person has prepared a Will and then moves to another country, province or state, or where the testator owns property in a foreign jurisdiction there can be conflicts between the laws of the jurisdictions that could prevent the Will from being interpreted as the testator had intended. In this case the testator may wish to prepare a Will in the form prescribed for an International Will. A properly prepared International Will is then recognized as valid in any other state or nation that has adopted the Washington Convention. If you own assets in a different country or state, or if you have a foreign domicile, then please seek advice from a lawyer in the relevant jurisdiction.
To properly execute your Will, you will have to be present with your chosen witnesses. You will have to identify to them that this document is your Last Will and Testament. You will then initial each page of the document at the bottom of the page, below all the text, except the signing page of your Will, which requires your full signature. To be valid, you must sign the final (signing) page with your usual check-signing signature. No text should appear on the last page after your signature – other than the witness signing area. Signing and initialing of the pages must occur in the presence of your witnesses.
In most states, if one of your witnesses is also a beneficiary, then your Will is still valid, but any gift to a witness may be reduced in value to that permitted by law. In general, where a witness is also a beneficiary, this can create a presumption that the gift was given under duress.
To ensure that your Will is followed exactly, your witnesses should not be any person to whom you leave property, nor the spouse of any person to whom you have left property.
Yes, but only if the executor is not a beneficiary in your Will.
The best approach is to use a self-proving Last Will.
You do not have to file your Will with any court system or government body. However, you should store your Will in a safe place where your executor or personal representative will be able to locate it.
The governing law for your Last Will and any Codicils attached to it will be the law of the jurisdiction where you live at the time of your death. However, the probate court will want to verify that your Last Will was executed (signed and witnessed) correctly. In most jurisdictions the probate court will want to verify that your Last Will and Codicils were signed in compliance with one of the following: