WHERE THERE’S A WILL, THERE’S A WAY

Live now, pay later may well be the philosophy of many people in Britain today, as the amount of debt we accumulate through credit cards, mortgages and loans continues to grow.  Equally, as the post-war baby boomer generation approaches retirement age, we are becoming a society where older people make up a more significant share of the population.

As life expectancy rises, the demands on society to make adequate provision for the care of older people increases.  The provision of accommodation, whether in one’s own home, with the family, or in a care or residential home, needs to allow dignity and respect for our mature citizens.

We may hope that the government will take the right action in this area but the ever-increasing costs of the NHS and State pension funding mean that we should also plan for our own future.

One important way to plan for the future is to make a will.  Birth, taxation and death are three inevitable facts of life.  However, Inheritance Tax payable on your assets after your death could possibly affect over 10 million homes or 40% of households in the UK, according to a recent report from Scottish Widows, the reason being that as house prices have risen dramatically in recent years, the rise in IHT threshold has barely kept pace with inflation and now stands at £300,000.  What this means is that if a person dies with an estate, i.e. property and assets, worth over £300,000, the estate is liable to IHT of 40% on anything above £300,000.  So, for instance, an estate worth £450,000 would be liable to Inheritance Tax of £60,000. 

To minimise the impact of tax on your family, you should seek specialist tax planning advice from Sandersons solicitors by making a will and receiving advice on Inheritance Tax planning so that you can reduce or even avoid this tax altogether.

In fact, over 50% of adults in the UK do not have a will and are risking their assets not being distributed as they wish after death, according to a recent survey by AXA Sun Life. 

If you die “intestate”, without a will, the law provides that certain members of your family who survive you will be entitled to your assets whether you want them to have them or not.  However, long term partners or friends have few, if any, legal rights to your assets if you die without a will.  To ensure that your wishes are carried out, you should seek legal advice and have a solicitor draw up a will to make sure your property and belongings are distributed how you want them to be.

You should resist the temptation to make a will yourself.  It is generally advisable to use a solicitor to prepare a will for you to make sure it will have the effect you want.  This is because it is easy to make mistakes which may have an impact after your death, e.g. not being aware of the formal requirements needed to make a will legally valid, or not taking into account the technical/legal meaning of words or phrases. 

Your home may well be the most valuable asset that you have.  You should seek legal advice about how to try and protect it against claims against your assets by the providers of residential and nursing home accommodation.  You might want to consider gifting your home to your adult children, for example, whilst protecting your right to continue to occupy your home for as long as you wish.  Such a gift would need to be balanced against how the Inheritance Tax legislation deals with what are called ‘gifts with reservation of benefit’ that is to say gifts of property in which the giver retains a benefit – in this case, the benefit of continuing to live in a property which the giver no longer owns.

In essence, you should make your will an essential part of your personal financial planning for the future.  Seek the right legal advice and remember – where there’s a will, there’s a way.

You should also consider making a lasting power of attorney which would enable your affairs to be looked after even if you were to lose the capacity to deal with them yourself  because of subsequent ill health, for example.

Sandersons, Solicitors

17-19 Parliament Street

Hull, HU1 2BH 

Tel: 01482 324662

e-mail : enquiries@sandersonssolicitors.co.uk

 Source: Yorkshire Today, October 2007