Making a will and planning ahead FAQs

Yes. You can reduce the value of your estate in a number of ways:

• You can give away assets up to any value, or put them into trust, during your lifetime. These are called ‘potentially exempt transfers’ or PETs. If you survive for at least seven years after making a PET it is not treated as part of your estate for inheritance tax purposes. If you die within seven years it might not reduce inheritance tax payable or might reduce it only partially, depending on how long you survive — so you shouldn’t make PETs without taking advice.
• You can give away up to £3,000 in any one tax year (and carry forward any amount you do not give away one tax year into the next tax year) to anyone you like. No inheritance tax is payable on this gift, even if you die immediately afterwards.
• You can also make gifts of up to £250 to as many individuals as you want (except anyone who gets the tax-free £3,000 from you in that tax year).
• You can make gifts to family and friends who are getting married or registering a civil partnership. You can give up to £5,000 to any child of yours, £2,500 to a grandchild and £1,000 to anyone else.
• You can make gifts to charity.
• You can make regular payments out of your income, provided they do not affect your standard of living. For example, you might pay premiums on an insurance policy that will pay out when you die.
• You can make gifts if they are maintenance for dependent relatives (such as children, former spouses or civil partners, and disabled relatives).

You may also want to look into other inheritance tax planning options. For example, there are inheritance tax reliefs for many business assets, including shares in most unquoted companies. There are also reliefs for agricultural property, farms and woodland. Tax planning is complex so you should take advice.

If you are in a business partnership and there is no partnership agreement, your death brings the partnership to an end. This has tax and commercial consequences, and could also result in the beneficiaries under your will having to pay unnecessary inheritance tax.

The partners should therefore make sure they have a written partnership agreement. This can say that the partnership will continue and set out what will happen to a deceased partner’s share. You should make sure that the agreement reflects what you want to happen: for example, how your share of the partnership should be valued.

Similar considerations apply if you are a shareholder in a private company. The company’s articles of association and any shareholders agreement should set out what happens: for example, whether you are allowed to leave your shares to whoever you want.

For inheritance tax purposes, business property relief may apply to your interest in a business, provided you have owned it for at least two years when you die. This could save all or part of the inheritance tax that you might otherwise be liable for. You should take advice to check your tax position and whether there are any steps you should take to improve it.

No. You must not make any changes to your will after it has been signed and witnessed. If you write or type on it you may invalidate it. It’s also best to avoid stapling or pinning anything to it, as this could imply there is something missing and raise doubts as to its validity.

The only way to change your will is to either make a new one or add a codicil (which amends your will, rather than replacing it). Like a will, a codicil needs to be properly witnessed to be valid.

Your will only takes effect when you die so you cannot use it to say what happens before then. You can indicate your wishes to your family, and to doctors and other medical staff treating you, by making an ‘advance decision’ (commonly known as a living will). This sets out which treatments you do not consent to — resuscitation, blood transfusions and so on — if you are not in a position to communicate your wishes at the time.

You cannot use an advance decision to:

• Require someone to end your life (euthanasia) or to help you end it yourself (suicide).
• Refuse consent to being given food and drink, painkillers or basic care (for example, to maintain personal hygiene).
• Insist on certain treatments — it is the doctors who decide on treatments, and you either consent to them or not.

If you make an advance decision you should give your doctor a copy, ask for it to be added to your medical record, carry a card saying it exists and give copies to family members likely to be contacted in an emergency.

Ask a solicitor to help you draft an advance decision. It must be very precise and is not legally binding unless the formalities are complied with. If you already have a health and welfare lasting power of attorney, you need to be sure they are consistent.

If you own property overseas, you usually need to make a separate will in that country, taking into account local succession laws and inheritance tax. For example, in many European countries a proportion of your assets is automatically inherited by your nearest blood relatives (not including your spouse or civil partner). In some countries inheritance tax (or its equivalent) can be punitive unless you take steps to minimise your liability.

Your foreign will and the will you make here must dovetail with each other. You may also need tax advice across all the territories where you own property, so make sure your solicitor here is aware of your foreign assets.

A simple will might cost as little as £75 - £200 plus VAT. A more complex will, for example one that prevents children inheriting until they reach a particular age, might be around £350 - £400 plus VAT. If you have assets worth more than the inheritance tax threshold of £325,000, or own a business, you may need more detailed advice.

For a better idea of what will-writing service will suit you best and the likely costs, contact QualitySolicitors on {{phone}}; our Free Initial Assessment is a free five-minute chat with us so we can tell you how we can help.

Of course it’s well known that in order to make a valid will, you need to declare that you’re of ‘sound mind’.  That is, you have the mental capacity to think clearly about what you want to happen to your assets after your death.

If you anticipate a time in future when you’re going to have difficulties with making decisions about your wellbeing, then ‘power of attorney’ is a legally binding way of allowing someone you trust (usually a family member or very close friend) to make certain important decisions about you.  You can define precisely what you want this designated person to be responsible for, and power of attorney can typically be used to implement controls over your finances, your health or your welfare.

The costs of setting up a lasting power of attorney will also depend on how complicated your requirements are. If you want to set up both a property and financial affairs LPA and a health and welfare LPA, this might cost £400—£600 plus VAT. The Office of the Public Guardian charges a further £110 fee to register each lasting power of attorney.

Your children can’t contest your will just because they think it’s unfair.

They (and other family members, and anyone financially dependent on you) could claim in court that your will does not make ‘reasonable financial provision’ for them. If they succeed, the court can effectively rewrite your will so that they do get reasonable provision.

However, it is extremely unusual for adult, independent children to succeed in a claim for reasonable financial provision. A side letter explaining why you are leaving everything to your partner — for example, because your children are grown-up and financially independent — should significantly reduce the risk.

If you are elderly, your children might try to show you didn’t have mental capacity when you made your will — you did not understand what you were doing. If there is any risk of this you may want to get a certificate from your doctor confirming that you are mentally competent when you make your will.

You can discourage your children from challenging your will by leaving them something in the will — but at the same time including a clause saying that anyone who challenges it will be disinherited.

You may want to discuss your intentions with your children to help them understand what you are doing and your reasons. If you feel they are likely to challenge your will, you should let your solicitor know.

You cannot force the company to accept your husband as a shareholder. Any share transfers, including through your will, are governed by the company’s articles of association and any shareholders’ agreement. For example, these might allow the company’s directors to block any transfer.

You should check what the articles and any shareholders agreement say and take legal advice. Your best option may well be to deal with this situation now — for example, by negotiating an agreement with your children — rather than risk creating a dispute after your death.

Key issues to think about include:

• Who you want to inherit — your beneficiaries — and whether you want to leave them particular items, a specific sum of money or a share of your estate.
• Who your executors will be — the people legally responsible for carrying out your wishes after you have died.
• Whether you want to set up a trust in your will — for example, for beneficiaries who are too young to give money to outright when you die, or who need ongoing care, or just to save inheritance tax.
• Whether you want to appoint guardians to look after younger or disabled beneficiaries after you die.
• Making sure the will is properly signed and witnessed. Witnesses (and their spouses or civil partners) cannot inherit under your will so don’t ask anyone you want to inherit to be a witness.
• Whether anyone might be able to claim ‘reasonable financial provision’ from your estate if you decide not to leave them anything (or as much as they are entitled to).
• Any opportunities to reduce the amount of inheritance tax.

A good option is to think through all the key issues yourself, but then ask a solicitor to draw up the actual will for you. This gives you the opportunity to get any advice you need: for example, on complex issues like inheritance tax or setting up a trust for children. It is not expensive, especially given that a will disposes of absolutely everything you own. Any mistake or uncertainty could cause a great deal of extra unhappiness for your loved ones at what is already a difficult time for them.

It can. You can set up a trust in your will and make your daughter the beneficiary. There are a number of ways such a trust could operate — you would need to take legal advice — but her husband would have no legal right to the capital or the income, either while she is alive or if she dies before him. The trust might be taken into account in any divorce settlement.

Trusts are flexible so you may want to set one or more up for other purposes too, such as to provide a fund to pay for your grandchildren’s education when they are older, or for a disabled member of the family.

The tax treatment varies for different types of trust. You need to think about the inheritance tax, income tax and capital gains tax consequences. This is a complex area where you need specialist advice on your particular circumstances.

Enduring powers of attorney (EPAs) were replaced by lasting powers of attorney (LPAs) from October 2007. EPAs made before that are still valid and you do not have to convert them to an LPA unless you want to.

One issue with EPAs is that they give your attorney power to deal with your property and finances for you, but not your health or welfare — for example, where you live or your medical treatment and care. You can make both a property and financial affairs LPA and a health and welfare LPA.

So your mother could decide to keep her existing enduring power of attorney (because it already gives her attorney the powers they need to deal with property and finances) but make a health and welfare LPA too. Or she could cancel her existing EPA and make two new lasting powers of attorney — one covering health and welfare, and one covering property and finance.

Whatever she decides to do, a solicitor can help with the whole process.

She should seriously consider it. A lasting power of attorney (LPA) ensures that if for any reason she becomes unable to deal with her finances or make decisions about her own welfare, people she trusts (her ‘attorneys’) can do so on her behalf.

Your mother can make a property and financial affairs LPA which gives the attorneys the power to deal with financial matters. She can also make a separate health and welfare LPA, covering decisions about healthcare and welfare.

In each case she will need to appoint one or more attorneys. Her attorney could be an adult family member, a professional adviser or anyone else she trusts absolutely and who has the experience and ability to manage her affairs. She can choose different attorneys for each of the LPAs if she wishes.

Your mother should also make a will while she has capacity to do so. Any will made once she starts to lose her mental capabilities could be invalid.

Your mother’s will is not valid if she is mentally incapable when she makes it. Often someone is mentally incapable because of dementia such as Alzheimer’s disease. However, the fact that someone has a mental disability or disorder does not in itself mean that they are mentally incapable of making a will.

To draw up a valid will, your mother must understand what a will is, the effect of making one, the extent and value of her property, and any expectations her family, friends or others might have that they will be left something. If she is only mentally incapable at certain times, she can make a valid will during a lucid period. It is wise to have a doctor or psychiatrist there who certifies that she was capable at the time.

Your mother should also consider making lasting powers of attorney (LPAs) while she has the mental capacity to do so. If she becomes unable to deal with her finances or make decisions about her health and welfare, this means someone she trusts — the ‘attorney’ she appoints in her LPAs — can deal with these areas for her.

Yes. If you are worth more than the inheritance tax threshold (or ‘nil rate band’) of £325,000 when you die, there is a potential liability to inheritance tax at 40 per cent on the excess over that figure.

There is usually no inheritance tax on anything you leave to your spouse or civil partner. But if you leave them everything, their estate will be correspondingly bigger when they die, and so may become liable to inheritance tax that could have been avoided.

You may be able to save unnecessary inheritance tax by leaving some of your estate direct to your children or grandchildren instead. Putting assets in a trust — for your spouse, civil partner, children or grandchildren, for example — can also reduce inheritance tax. 

It’s a good idea to consider setting up a trust for her in your will (or even during your lifetime if you can afford to). Trusts for vulnerable people can qualify for special tax treatment.

You can also appoint guardians who agree to take responsibility for her after you have gone.

This is a complex area, so take legal advice.

An attorney cannot use a lasting power of attorney (LPA) until it has been registered with the Office of the Public Guardian. An LPA can be registered at any time, so your uncle’s LPA may be registered already.

If you need to register the LPA, you may want to apply as soon as possible. Your uncle will be notified that you have applied, so you should discuss this with him first. His nearest relatives may also be notified. Once you have applied, you will have to wait at least six weeks. If anyone objects to the registration, it may not happen at all.

Even once it has been registered, it may not automatically take effect:

• A health and welfare LPA only takes effect once your uncle has lost the capacity to make decisions for himself.
• A property and financial affairs LPA may come into effect as soon as it is registered, or may say that it only takes effect once your uncle has lost mental capacity. 

Once the LPA comes into effect, you should talk to your uncle about it. Even if he is no longer fully capable, you should try to involve him in decisions about his own affairs. If you need to check whether your uncle has mental capacity, you should do this for each decision — your uncle may be capable of making some decisions for himself, but not others. If necessary, you may want to take legal advice or get a medical opinion.

You should consider making a new will if you have married or entered into a civil partnership since making your old will, as this will generally automatically revoke it. That means that your will is invalid. It depends on the circumstances, but if you die without making a new one your estate will probably be distributed according to the intestacy rules.

You should review your will if there are births, deaths, marriages, name changes, bankruptcies, civil partnerships, divorces, ending of civil partnerships or relationship breakdowns, in your life or among your beneficiaries, or if an executor dies or is unable to act for any reason. You should also review it if your financial circumstances change significantly — for example, if your estate looks likely to go over the inheritance tax threshold of £325,000 for the first time or if changes in tax law are likely to have an impact — or if you or a beneficiary need to go into a nursing or care home.

In any event, you should review your will every few years to check that it still reflects your wishes and in case any changes are needed. For example, you may need to appoint a new executor if an executor named in your will has died.

The executors are the people named in a will who are legally responsible for carrying out the will-maker’s wishes — collecting in the property they leave behind (their ‘estate’), paying off the deceased’s debts and liabilities and distributing the estate to the beneficiaries under the will.

Your executors will be responsible for:

• Identifying everything in the estate — for example, cash from bank accounts, investments and so on.
• Valuing assets such as your home and any shares.
• Calculating any debts and liabilities — for example, mortgages, other borrowings and any tax liabilities due up to the date of death.
• Completing inheritance tax forms, dealing with any inheritance tax due and applying for a grant of probate (which allows them to deal with the estate).
• Paying funeral costs (or reimbursing whoever has already paid them).
• Collecting in the assets and paying the debts and liabilities.
• Making distributions to beneficiaries in accordance with the terms of the will. This may mean tracing beneficiaries whose addresses have changed.
• Drawing up estate accounts for the beneficiaries so they can see that everything has been accounted for.

Executors often also act as trustees if the will sets up a trust — for children under 18, for example.

Being an executor can involve a lot of work. It can take six months or more to wind up even a simple estate and over a year for more complex estates. Your executors should not only be people you trust absolutely to carry out your wishes, but they must also be willing and able.

You may want to consider appointing a solicitor as one of your executors. Alternatively, your executors can themselves decide to get help from a solicitor when the time comes.

Most property you own jointly — such as a bank account or your home — is not treated as part of your estate when you die. Instead, it automatically passes directly to the surviving owner. These items do not need to be included in your will, although you may wish to include them in case this changes in the future. 

However, check that you don’t jointly own any assets as ‘tenants in common’ — where each of you owns a share of the asset. If you do, your share does form part of your estate and will pass under your will. For example, you may have bought a house with a partner and own it in proportion to the amount you contributed to the purchase price and the mortgage payments. You can each leave your share to whoever you want in your will.

The intestacy rules are legally binding rules saying what happens to everything that you own — your ‘estate’ — if you die without making a will.

But the intestacy rules do not guarantee that your wife (or civil partner if you are in a civil partnership) and children will get everything, or that your estate will be divided between them in the way you want. The best way to make sure that your wife and children get everything is to make a will.

Circumstances in which it can be particularly important to make a will rather than rely on the intestacy rules include:

• Your estate could exceed the inheritance tax threshold of £325,000, triggering a potential liability to inheritance tax at 40 per cent. If you leave everything to your spouse there is no inheritance tax but if she were to die first it could be payable. Making a will can reduce the inheritance tax bill.
• The value of your spouse’s assets (including any inheritance from you) means that inheritance tax is likely to be payable when she dies.
• Some of the children that you treat as children of the family are not yours (for example, they are your wife’s children from a previous relationship).
• You want specific people to be your executors — the people legally responsible for dealing with your estate when you die.
• You want to leave something to children who may still be under 18 when you die. If so, you can set up trusts for them in your will, to hold their inheritance until they come of age or later.
• You want to make special provision for someone who is dependent on you, such as a disabled child.
• You want specific people to get certain assets — for example, a picture or family jewellery.
• There is someone who would be entitled to a share of your estate under the intestacy rules but you don’t want them to get anything.
• You own a business as sole trader or partner.
• You own shares in a family company.
• You own property abroad.
• You want to avoid or reduce liability to pay care or care home fees in the future.
• You want to nominate a legal guardian to look after your children if something happens to both you and your wife.
• You want to leave money to charity or some other cause close to your heart.
• You, your spouse or some other person you want to leave something to, are not UK resident, or are not domiciled for tax purposes in the UK.