Now is the time to make your will
A will is a legal document which sets out how your assets are to be distributed after your death. The importance of making a will cannot be over emphasised. Difficulties arise where there is no will due to the fact that in the absence of having written a will the law decides how your estate will be distributed.
By writing a valid will you can appoint an individual or individuals to act as your executor(s). An executor’s role is to ensure that your estate is distributed according to the terms of your will and the rules of law. Generally your executor will collect your assets, pay your debts and distribute your estate. One has liberty to make provision as one sees fit in their will with the exception that there are certain rules governing the entitlements of a surviving spouse. By virtue of the Succession Act 1965 a surviving spouse has an entitlement to a certain portion of their husband’s/wife’s estate and the size of the legal entitlement depends on whether or not there are any children. These legal rights must be borne in mind when making a will. If they are ignored when making a will it can lead to disputes in regard to your estate.
On the other hand if you have not made a will then there is no executor. In this case no one with an immediate right to deal with your affairs on your passing and until a personal representative comes forth and takes on this role your assets are effectively frozen. The person who has entitlement to act as personal representative is again determined by the law. In cases where there is no will the law sets out the share that your surviving family members inherit. In the event that you have no surviving relatives the State will inherit your assets.
For those who have children it is particularly important to write a will appointing guardians who will step into the role of parent and look after raising your children. In this case trustees must also be nominated to deal with your children’s inheritance until they reach the age at which they inherit their portion of your estate.
In writing your will it is also important that you take inheritance tax into account. Writing a will allows you to plan for tax purposes to a certain extent. The law sets out certain tax free thresholds for certain groups of beneficiaries and if the amount of the inheritance exceeds the threshold then there can be a liability on the beneficiary to pay inheritance tax at the rate of 33% on the amount exceeding the threshold. (current tax rate for CAT). There are also certain reliefs and exemptions available including Business Relief, Agricultural Relief, dwellinghouse Relief, Favourite nephew/niece relief, minor child of a predeceased child to name some of the more prevalent reliefs. All of these reliefs are subject to specific conditions and therefore it is important to review such matters thoroughly before you write your will.
Recent changes in the law regarding Succession Rights have been enacted with the passing of the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010. The Act introduced inheritance rights for civil partners and it also made provision for cohabitants who fulfil certain conditions. Cohabitees under the Act do not have the same rights as married couples or civil partners. Cohabitees do not have an automatic right to inherit from their partner’s estate but they now have the right to apply to Court requesting that provision is made for them from their deceased cohabitee’s estate. The application can only be brought if you fall within the legal definition of cohabitant and provided the application is made within the time frame allowed in the legislation.
Remember your will should be reviewed on a regular basis and especially if any major life changes occur including marriage, the birth of children, separation or divorce, the sale or acquisition of new assets. Your will does not have any effect until your death. If you make a will today and leave your estate to a certain individual that individual has no legal right to that property while you are alive.
For further information please contact 069 77583 for a consultation.