Modern Will Considerations.

A Will is a document which needs to be regularly reviewed to ensure that it continues to meet your needs. In the past year, there have been two significant legal developments which could affect the effectiveness of your Will. There is also a third issue that may need to be addressed.

 

With the high price of properties in London and the South East, the current individual nil rate band of £325,000 seems low. This can be increased by a further £100,000 or £175,000 depending on the facts of each case but this only applies if the family home is given to lineal descendents. Inheritance Tax (IHT) after deduction of £325,000 is at 40%. Thus different methods should be considered as a means of reducing or eliminating potential tax liability. Gifts to spouses\ civil partners remain tax free and the possibility exists to transfer the nil rate band of a predeceased spouse\ civil partner.

 

You are free to gift your assets to whomsoever by Will but this rule is subject to exceptions. Provisions in place to challenge a Will have been highlighted by the case of Ilott where a mother died not bequeathing any legacy to her adult daughter. The Court now appears more open to claims by those left out of a Will, in particular any person for whom reasonable financial provisions should have been made. A full explanation is one way to minimise or defeat such potential claims.

 

Another pressing issue that has prevailed for some years relates to care as we advance in age. Care home fees are a pressing issue. Should we need care in later life, the costs can be eye wateringly expensive. Any capital including assets worth more than £23,500 may mean that you may not get help from the state. These fees could easily be up to about £1,500 a week depending on various factors including whether there is a nursing element. If you do not have the cash but have assets such as a home, a legal charge will normally be placed at the Land Registry and payable when it is ultimately sold. Consideration should be given to what could be done to limit this liability before care is needed.

 

2017-11-06T15:07:44+00:00