Writing a Will and Inheritance Tax The importance of writing a Will and inheritance tax considerations

At Heald Solicitors in Milton Keynes, our expert Wills, probate, and trusts solicitors can work with you to ensure that you have the right Will in place for your needs. We will discuss your options with you and tailor your Will to give you and your loved ones the peace of mind of knowing that, when the time comes, they will be provided for in the way that you have chosen.

Benefits of having a Will

Certainty – Making a Will gives your loved ones the certainty of knowing what your wishes are, which can be reassuring for them at what will be a difficult time. This can also go a long way to reducing unnecessary stress and avoiding disagreements between family members.

Choose your executors – our executors will be responsible for winding up your estate. If you make a Will, you can choose individuals you trust and whom you feel will be able to take on this task, or you could appoint ourselves to undertake the work for you, safe in the knowledge that we are experts in this field.

Appoint guardians – If you have minor children, you can appoint guardians in your Will to care for them. Without a Will, the court will decide who will look after them, and it might not be the person you would have chosen.

Blended families – If you have remarried and have children from a previous relationship, there is a risk they could lose out on their inheritance unless you have a valid Will in place. Without a Will stepchildren could easily miss out on being provided for.

Avoiding intestate succession - If you die without a will (intestate), the state will determine how your assets are distributed, which may not align with your wishes. Having a will ensures that your desires are honoured, rather than leaving the decision to be made by people that don’t know you.

Protection for civil partners- If you're not married but want to leave assets to a partner, a Will is essential to ensure they receive your estate. Without a Will, a non-spouse partner may not have automatic rights to inherit your assets.

Ensuring specific bequests - A will gives you the ability to bequeath specific items, such as family heirlooms, jewellery, or sentimental possessions, to particular individuals, ensuring that these items are passed on to the right people.

Minimising legal complications and disputes - A clear will can help reduce family disputes or confusion about the distribution of your estate. Without a Will, family members may contest decisions or disagree on how assets should be handled, which can lead to lengthy and costly legal battles.

Inheritance Tax

To mitigate Inheritance Tax (IHT), planning is very important. This involves understanding the impact of lifetime gifts, which can significantly reduce the taxable estate. Lifetime gifts of property and money to family members, or even gifts of income, are strategic moves that can help reduce the overall tax burden.

By structuring your estate to take advantage of the available allowances you can ensure your estate is as tax-efficient as possible. This will help secure the best outcome for your family and loved ones, whilst minimizing the tax payable and maximizing the legacy you have left behind.

The nil-rate band – This is the threshold above which Inheritance Tax is payable. It is currently set at a maximum of £325,000 per person. The nil-rate band can usually be transferred between married couples when one dies, if it has not been used by their estate.

The residence nil-rate band – There is also an Inheritance Tax allowance of a maximum of £175,000 per person in respect of residential property that is passed on to a child or grandchild.

This means that a couple could have a total allowance between them of £1m on which no Inheritance Tax would be payable.

If you own a business, or any form of agricultural land, or buildings, then your estate may be entitled to claim these reliefs to reduce any IHT burden. We can also advise on any eligibility criteria so that you can be assured that your estate is in safe hands.

We can help you structure your estate to take advantage of the available allowances and ensure that it is as tax-efficient as possible by working with other advisors on your lifetime planning, to ensure the best outcome for your family and loved ones.