15 Apr 2024
15 Apr 2024
Nobody likes discussing their estates or dying. It’s not an easy topic and it’s scary to think about. But it’s part of the everyday unpleasantries we must deal with and ensures your nearest and dearest are looked after. Drawing up a will.
Making a will is a significant step in managing your estate and ensuring your assets are distributed according to your wishes after you pass away. One of the most substantial assets you might own is your home, and deciding to leave it to someone in a will is a decision that requires careful consideration.
A report from The National Will Register has found that 42% of adults in the UK have not spoken to anyone about what should happen to their estate upon their passing. This already traumatic event of losing a loved one can become unnecessarily chaotic to your loved ones if pass and they have no idea what to do with your estate.
Further research by the National Will Register found that only 44% of UK adults have made a will. This equates to around 23.75 million wills. Interestingly, the majority of wills (58%) have been made by those over the age of 55, with two-thirds of that age group having made a will.
Only 30% of people under 55 have made a will. There is also a noticeable gender wills gap between men and women as to making a will, with half of men saying that they have made a will while only 4 in 10 women (39%) saying the same.
Any property that you own in the UK, be it land or buildings, can be bequeathed to someone in your will. However, the way in which you own the property impacts how it can be passed on.
For those who own property as a 'joint tenant'—a common arrangement among married couples and civil partners—each owns an equal share of the property. In this case, when you pass away, your share is automatically transferred to the surviving co-owner.
This situation leaves no room for alternative choices through a will. So, you can’t decide to leave your half of the property to your children or grandkids. The only situation where this would be possible is if the property is held as 'tenants in common.' In this scenario, you can decide who inherits your portion of the property, potentially including your spouse or partner, and this choice remains effective until their passing.
1. Making a Will: The first step is to create a will if you haven't already. It's advisable to consult with a solicitor who specialises in wills and estate planning to ensure your will is legally valid and your wishes are clearly articulated.
2. Specifying the Beneficiary: Clearly identify who you want to inherit your home. This can be a family member, friend, or even a charity.
3. Describing the Property: The property needs to be clearly described in the will to avoid any ambiguity. If you own multiple properties, be specific about which property you're leaving to which beneficiary.
Leaving your property to someone in a will is an important decision that not only ensures your assets are distributed according to your wishes but also offers several key benefits and peace of mind for both you and your loved ones.
1. Guaranteed Fulfilment of Your Wishes
By specifying in your will who inherits your property, you have the ultimate say over its future. This is particularly important for properties that hold sentimental value or represent a significant portion of your financial assets. It ensures that your exact intentions are carried out, preventing the state from making default decisions on your behalf.
2. Protection for Loved Ones
Leaving your property to someone in your will can provide them with security and stability after you're gone. For many, a home is more than just a building; it's a place of comfort, memories, and emotional attachment. Ensuring it goes to a chosen loved one can protect their future and maintain a sense of home and continuity.
3. Prevention of Family Disputes
Clarifying your wishes in a will can significantly reduce the potential for disputes among family members. When your intentions are clearly documented, there's less room for misunderstandings or disagreements about who should inherit the property, fostering harmony among your heirs.
4. Efficient Transfer of Assets
Having a will in place can streamline the legal process involved in transferring property ownership after your death. This can help avoid prolonged probate proceedings, reducing the administrative burden on your executors and beneficiaries and potentially saving time and money.
5. Flexibility and Control
A will allows you not only to name who should inherit your property but also to include specific instructions about its use, sale, or distribution. For example, you can specify conditions under which the property can be sold or ensure that it remains within the family for generations.
6. Tax Planning Benefits
Carefully planning how you leave your property can also have tax implications. In some cases, strategic inheritance planning, including the use of trusts within a will, can help minimise inheritance tax liabilities, maximising the value of the estate for your beneficiaries.
7. Supporting Non-Family Members or Causes
If you wish to leave your property to someone outside of your immediate family, such as a friend, caregiver, or a charity, a will is essential. Without one, intestacy laws do not recognise non-family members, and your property could not be passed to them.
1. Solicitor's Fees: The cost of drafting a will varies but investing in professional advice ensures that your wishes are clearly and legally stated.
For those considering the important step of drafting a will, our Hegarty offers a straightforward and transparent pricing structure. For an individual will, our standard fee is £375+VAT. For couples either married or in civil partnerships seeking nearly identical wills, we provide a reduced rate of £650+VAT for both.
If the Will is complicated or requires inheritance tax advice, additional charges could be incurred.
2. Inheritance Tax: The value of your property may contribute to the overall value of your estate, affecting the amount of inheritance tax due. There are allowances and thresholds to consider, such as the nil-rate band and the residence nil-rate band.
Inheritance tax (IHT) in the UK can significantly affect the value of the estate you leave behind. However, there are several strategies to minimise the impact of IHT, ensuring more of your wealth goes to your loved ones. Here are key methods to decrease inheritance tax:
Placing assets into a trust can be an effective way to manage how your estate is passed on to your beneficiaries while reducing IHT. Different types of trusts offer varying degrees of IHT efficiency, so professional advice is crucial.
A life insurance policy not included in your estate can pay out directly to beneficiaries upon your death, providing funds that can help cover any IHT liabilities. Ensure the policy is written in trust to avoid it being added to your estate.
The main residence nil-rate band (RNRB) is an additional threshold above the standard nil-rate band when your residence is passed to direct descendants. This could potentially increase the amount of your estate that is exempt from IHT.
Reducing your estate's value by spending your wealth during your lifetime or donating to charity can also decrease the IHT liability. Remember, donations to registered charities are exempt from IHT.
In today's digital age, the temptation to opt for a 'DIY will' is stronger than ever. With a plethora of information just a click away, many feel equipped to craft their own wills from the comfort of their homes, often motivated by the desire to save money or avoid a trip to the solicitor's office.
Many might view the cost of professionally drafting a will as superfluous, especially when weighed against other financial priorities or the perceived lack of immediate benefit. However, the expertise and guidance of a regulated solicitor in drafting your will can prevent disputes and ensure your estate is distributed exactly as you wish, without the risk of your final wishes being contested or ignored.
A solicitor will also make sure your property gift is back up with an alternative just in case you have sold your property, for example, if you need care in the future.
Our firm offers straightforward will drafting services at competitive rates. Utilising a solicitor's services means benefiting from their deep legal knowledge, foresight, and the assurance that your will is valid, clearly articulated, and recognised by the courts. Moreover, solicitors can register your will, ensuring it is easily located and acknowledged as your definitive last wishes.
The straightforward answer is no. Selecting an executor, the person or people responsible for managing your estate and executing your final wishes, is a critical decision. This role can be quite demanding, underscoring the importance of choosing wisely. When drafting your will, your solicitor is obligated to prioritise your interests, helping you navigate the decision-making process. This includes evaluating the size and intricacy of your estate and discussing your executor options with you.
Executors can be either professionals, like solicitors, or non-professionals such as family members or beneficiaries. Non-professional executors have the option to hire a professional for help with estate administration, with the costs covered by the estate. In scenarios where the estate is complex or there's a risk of disputes among beneficiaries, appointing a neutral solicitor as the executor might be advantageous. When considering a solicitor for this role, it's best practice—and advised by the Law Society—for them to give you a clear estimate of the potential costs involved in acting as your executor.
Leaving your home to someone in a will is a powerful way to make a lasting impact on the lives of those you care about or support a cause close to your heart. It requires thoughtful planning and legal guidance to ensure your wishes are fulfilled and your beneficiaries are protected. Contact Hegarty to find out more information. We have a team of legal experts ready to help you.
