Writing a will
One of the most important things you can do to help reduce the amount of IHT you’ll have to pay, is write a will. If you die without a will, your estate is divided out according to a pre-set formula and you have no say over who gets what and how much tax is payable.
Get professional advice
You should consider getting professional advice, as an expert will be able to tell you the best and most tax-efficient way to write your will.
Wills for couples
Many couples write mirror wills, which mean the same things take effect regardless of which partner or spouse dies first. You can’t have a joint will.
Keeping your will up-to-date
You need to keep your will up-to-date. Getting married, divorced or having children are all key times to review your will. If the changes are minor, you could add what’s called a codicil to the original will. This is a document which can have the effect of making small amendments to your original will. You should consult a solicitor before doing this. If they’re major, consider writing a new one.
Helpful notes
Put your will in a safe place and make sure the executors know where it is.
Some Questions
You’ll need to ask yourself some questions before you write your will:
- Who do I want to benefit – my spouse or partner, children or other friends and relations? They become known as the beneficiaries.
- How much do I want to give them? You can either give a named legacy – such as a family heirloom or treasured item – or a monetary gift.
- How do I own my house? If you own it as ‘tenants in common’ with your spouse or partner, then you each own a percentage that can be left to another person on death. Owning a property as ‘joint tenants’ means that you both own 100% and it solely belongs to the other on your death.
- What is the best way of minimising any IHT I may have to pay?
- Who do I want to look after any of my children under the age of 18 when I die? They will become their legal guardians.
- Who do I want to administer my will when I die? They’re called the executors and their tasks include collecting in any outstanding debts to your estate, paying off any loans and IHT due and then paying out what is left according to your wishes. Many couples name their partner as executor, but it could be worth choosing a second one in case you should both die at the same time.
- Do I want to put my money into trust when I die to provide an income and capital for my dependants? If you do, consider getting financial advice about the best trust to use.
- Who will look after the trust? A trustee, as they’re known, can either be a family member or friend or a professional such as a solicitor or financial adviser.
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