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- Financial reasons for making a will

Financial Reasons for Making a Will
 
Putting it off could mean that your spouse receives less
 
Many people think they can avoid inheritance tax and long term care costs by giving their home away to their children.

If you don't have a will there are rules for deciding who inherits your assets, depending on your personal circumstances.
http://www.willsandtrustsmadesimple.co.uk


Financial Reason Number 1 for Making a Will
 
Putting it off could mean that your spouse receives less
 
It's easy to put off making a will. But if you die without one, your assets may be distributed according to the law rather than your wishes. This could mean that your spouse receives less, or that the money goes to family members who may not need it.

If you and your spouse or civil partner own your home as joint tenants, on the first death the surviving spouse or civil partner automatically inherits all of the property. This may not be the best way to own your home. By changing ownership to "tenants in common" you can effectively take your home out of any calculations the local authority will make to determine who pays for the cost of care home accommodation should it be needed in the future. This ensures that your home need not be sold and preserves an inheritance for those you wish to benefit from your estate.

Please see the article on our website called; ‘How do I protect my home from care costs?'  http://www.taps.ws/cliffordnicholas/articles/
 
Financial Reason Number 2 for Making a Will
 
Many people think they can avoid inheritance tax and long term care costs by giving their home away to their children.

You need to bear in mind;

• Gifts to your children, unlike gifts to your spouse or civil partner, aren't exempt from Inheritance Tax unless you live for seven years after making them.
• If you keep living in your home without paying a full market rent (which your children pay tax on) it's not an 'outright gift' but a ' gift with reservation', so it's still treated as part of your estate, and so liable for Inheritance Tax.
• Following a change of rules on 6 April 2005, you may be liable to pay an Income Tax charge on the 'benefit' you get from having free or low cost use of property you formerly owned (or provided the funds to purchase)
• Once you have given your home away, your children own it and it becomes part of their assets. So if they are bankrupted or divorced, your home may have to be sold to pay creditors or to fund part of a divorce settlement.
• If your children sell your home, and it is not their main home, they will have to pay Capital Gains Tax on any increase in its value.

By writing your wills and placing your property into trust we can help solve many of the problems highlighted above whilst enabling you to retain control and ownership of your home.
 
Financial Reason No.3 for making a will.
 
If you don't have a will there are rules for deciding who inherits your assets, depending on your personal circumstances. The following rules are for deaths on or after 1 July 2009 in England and Wales.
 
If you're married or in a civil partnership and there are no children
 
The husband, wife or civil partner won't automatically get everything, although they will receive:
· Personal items, such as household articles and cars, but nothing used for business purposes
· £400,000 free of tax – or the whole estate if it was less than £400,000
· Half of the rest of the estate
The other half of the rest of the estate will be shared by the following:
· Surviving parents
· If there are no surviving parents, any brothers and sisters (who shared the same two parents as the deceased) will get a share (or their children if they died while the deceased was still alive)
· If the deceased has none of the above, the husband, wife or registered civil partner will get everything
 
If you're married or in a civil partnership and there were children
 
Your husband, wife or civil partner won't automatically get everything, although they will receive:
· Personal items, such as household articles and cars, but nothing used for business purposes
· £250,000 free of tax, or the whole of the estate if it was less than £250,000
· A life interest in half of the rest of the estate (on his or her death this will pass to the children)
The rest of the estate will be shared by the children on attaining age 18 or on earlier marriage.
 
If you are partners but aren't married or in a civil partnership
 
If you aren't married or registered civil partners, you won't automatically get a share of your partner's estate if they die without making a will.
If they haven't provided for you in some other way, your only option is to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975.
 
For more information visit our website www.willsandtrustsmadesimple.co.uk or email info@cliffordnicholas.co.uk or call Cliff or Nick on 01707 326123


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