5 good reasons to make a Will and keep it up to date
Make sure your wishes are followed
- With an up-to-date Will, you can have peace of mind that the people and causes that matter to you have been looked after the way you choose. It’s the only way to make sure your wishes are followed the way you intend.
Make it easier on friends and family
- A Will makes it much easier for your family and friends to take care of your estate and be sure they’re acting on your wishes. Without a Will, the process can be difficult, stressful and time-consuming.
Help to minimise Inheritance tax
- Under current law, if your estate is worth more than £325,000, your beneficiaries will have to pay 40% of the part of it that’s over the threshold to HMRC.
- So if your estate is worth £350,000, £25,000 of it is liable for inheritance tax, and your beneficiaries must pay £10,000 (40% of £25,000) to HMRC.
- The threshold and the rate change from time to time, so check the current figures on the gov.uk website (link is external).
What if you leave money to charity?
- There are two ways leaving a gift to charity can help reduce your inheritance tax bill.
- If you leave gifts to charity in your Will, the gift value won’t be counted towards inheritance tax. The same goes for gifts left to your spouse. This could reduce what your beneficiaries have to pay, or remove your inheritance tax liability altogether.
- In April 2012, inheritance tax legislation changed, meaning in some situations, anyone leaving 10% or more of their taxable estate to charity may qualify for a reduced rate of inheritance tax – 36% rather than 40%.
- To find out more about inheritance tax and estate planning, talk to your solicitor to see how the rules might affect you and your loved ones.
What about Capital gains tax?
- This type of tax is usually payable if you sell or give away something that has increased in value during the time you owned it. The increase in value is what is taxable.
- When someone dies the value of the things they own is re-established and any gains that arise during the administration of the estate (i.e. between death and sale) may be liable to capital gains tax.
- Executors have a tax free allowance that can be used to offset gains. See the current capital gains tax allowance (link is external).
- Charities are exempt from capital gains tax, so where charities are beneficiaries in a Will, it may be possible to use this exemption to benefit the whole estate.
Protect the rights of your partner
- If you and your partner aren’t married or in a civil partnership, you don’t have the same automatic rights as those who are married. You can make sure your partner’s looked after by naming them in your Will.
Give your assets to the people and causes you love most
- Without a Will expressing your wishes, your whole estate could end up belonging to the Crown or government. Write a Will to keep control.
What types of gift can you leave?
- A share of your estate – After you have provided for your loved ones, you can leave a share of what remains to charity. This is known as a ‘residuary gift’.
- A cash gift – This is when you leave an exact sum of money to us. It’s known as a ‘pecuniary gift’.
- A specific gift – Over the years we’ve received everything from a stream to antique jewellery.
- A gift in trust – You can leave a gift for someone to use over a period of time. When the time has ended, the gift can be passed on to other recipients, such as a charity.