Inheritance tax – Isn’t it time you made a will?
This article is an extract from Octopus Investments' publication "A guide to untangling inheritance tax" and it is reproduced with its permission. Read more about Octopus Investments.
The article has been written in accordance with Octopus Investments’ understanding of the law and interpretation of it at the time of publication: remember tax rules can change and benefits depend on circumstances.
If you want to have a say in what happens to your assets and possessions after you die, then you need to make a will.
Why make a will?
Making a will helps you decide exactly who gets what when you pass away. As well as determining who will receive your assets when you die, your will could also specify the legal guardian of your children.
In a will, you nominate a person (or people) to manage your estate (your executors). It’s their responsibility to carry out your wishes after your death. A will should also clearly state what happens if the people you want to benefit from your estate die before you do.
When should you get legal advice to create a will?
You can write a will yourself, but it makes sense to get legal advice to make sure that the will is legally binding and that your wishes will be followed correctly.
If you want to create a will, you might want to think about getting professional advice from a solicitor, tax adviser or financial adviser. There is some useful basic information on the HMRC website.
What happens if you don’t leave a will?
If you die without leaving behind a will, the legal term is that you have died ‘intestate’.
At best, this can mean your estate may not be passed on in line with your wishes. This can be a particular concern for couples who are not married or not in a civil partnership.
At worst, if you die intestate and you have no close relatives, then The Crown could end up with your assets. It’s therefore crucial to make a will if you don’t want this to happen, even if you want to leave your estate to your favourite charity.
- If you die without leaving a will, you won’t have the final say on who gets your assets – instead, it will be left for the courts to decide.
- After your will has been written, you should review it regularly, or after any major changes to your life (for example, getting divorced, having children or moving house).
- You should make sure you keep your will safe, but keep it where someone will be able to find it after you die.
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