A beneficiary is a person to whom who you wish to leave a particular gift in your Will. They can be an individual, a charity or there may be a class of beneficiaries, e.g. grandchildren. If a beneficiary is under 18 then unless an alternative age is specified they will be entitled to their inheritance upon attaining the age of 18.
Court of Protection
The Court of Protection is a specialist Court which deals with applications on behalf of people who have lost their mental capacity and are therefore unable to manage their own affairs. The Court has the power to appoint a ‘Deputy’ to deal with property and financial affairs and in some instances the health and personal welfare of the person who is no longer able to make their own decisions. The Court works alongside the Office of the Public Guardian to oversee the general management of the affairs.
Deed of Variation
Where a beneficiary may wish to vary what is left to them so as to pass it on to someone else.
A Deputy is someone appointed by the Court to make decisions for someone who is mentally incapable of doing so on their own. A Deputy is responsible for making decisions for a mentally incapable person until either the death or recovery of that person. A Deputy is usually a close friend or relative of the person concerned but can be a professional such as a solicitor, or a local authority.
Your Executors are the organisation, person or persons appointed by you to ensure that the instructions contained in your Will are carried out and are in charge of collecting all assets, paying any inheritance tax and distributing the estate to the beneficiaries as per the directions outlined in the Will.
Your Executors will need to identify the size of your estate, pay any debts and funeral expenses before distributing the remainder of your estate in accordance with your Will. This can be a complicated role and it is important that you consider your Executors carefully as it involves a great deal of responsibility.
Grant of Representation
A Grant of Representation is a document issued by the Probate Registry which authorises the Personal Representatives to administer the deceased’s estate. There are two basic types of Grant of Representation:
- Grant of Probate: this is where a deceased person has left a Will and the Grant of Probate is issued to the Executors appointed
- Grant of Letters of Administration: this is usually where the deceased person has not left a Will although it can be where a Will has been left but it is not proved by the Executors.
If you have children, it is important to consider appointing a guardian to look after your children in the event of your death. The appointment of guardians does not take effect until all persons with parental responsibility have died. Mothers automatically have parental responsibility for their children. Fathers also have automatic
parental responsibility if they are married to the mother at the time of the birth of the child or subsequently get married or become registered on their birth certificate after 1 December 2003. It is also possible to include a provision in your Will to provide your Executors with discretion to pay any costs/expenditure incurred by your guardians in the care of your children.
Inheritance Tax is payable on your estate (subject to some exemptions) when you die. The first £325,000 of your estate, known as the “Nil‐Rate Band” is taxed at 0%. The value of the estate which exceeds the Nil‐Rate Band is taxed at 40%. Assets that pass to spouses/civil partners are exempt from Inheritance Tax. Based on the information you have provided, if we feel that your estate is likely to be subject to Inheritance Tax we may contact you to discuss your options if you so wish. Where someone dies on or after 9 October 2007 who had been in a marriage or civil partnership (and the marriage or civil partnership came to an end on death) the survivor’s personal representatives have a ‘permitted period’ in which to claim the unused nil rate band of the spouse or civil partner who has predeceased.
If a valid Will is not made, you die subject to the intestacy rules. These are the statutory rules which have financial constraints and are rigid in their application.
The division of your estate under the intestacy rules depends on your surviving relatives. In the case of a Husband and Wife and two children, if the Husband were to die without a Will then the Wife will receive all the Husband’s personal belongings with a statutory legacy of £250,000 (or everything if the total is less) plus one half of any balance outright. The children will then receive the remaining half of the balance in equal shares. Where a person dies without a Will leaving a spouse but no children or other descendants, the whole estate passes to the spouse.
The intestacy rules do not apply to surviving partners who were not married or in a civil partnership with the deceased, or any stepchildren, therefore making a Will is important to ensure your family members receive their inheritance.
If a property is owned as joint tenants then on the death of one of the joint owners it passes automatically by way of survivorship to the surviving joint owner. Alternatively, a property can be owned as “tenants in common” which means that you would then be able to control the destination of your share of the property in your Will.
Lasting Powers of Attorney
A Lasting Power of Attorney (LPA) is a legal document that enables you to appoint someone (known as an Attorney/Attorneys) to make decisions on your behalf at a future time when you may not be able to make such decisions.
You can create two types of LPA:
- Property and Financial Affairs LPA
- Health and Welfare LPA
Your Residuary Estate is what is left of your assets after your funeral expenses, debts, administration expenses, any Inheritance Tax and any specific gifts or cash gifts have been satisfied. It is possible to leave a percentage of your Residuary Estate to particular beneficiaries or a certain number of shares. It is important to consider who you would wish to receive any particular percentage/share of your Residuary Estate if the chosen beneficiaries predecease you, for example, if your Residuary Estate is gifted to your children, provision can be made for the children of a predeceasing child to receive the parent’s share.
Upon signing your new Will any previous Will made by you will be revoked unless steps have been taken to avoid this. It is therefore important that you forward to us copies of any existing Wills and in particular any Wills made abroad so that your new Will can be prepared to ensure that any foreign Wills are not automatically revoked.
In your Will you can leave a specific item to a beneficiary, e.g. a certain item of jewellery or item of sentimental value. If that particular item is not within your possession at the time of your death, the gift will fail. It is also possible to leave any jewellery owned by you at the time of your death to a particular beneficiary. If you wish to leave a property to a beneficiary in your Will, please contact us to discuss this gift further as there are considerations that will need to be taken into account, e.g. if it is a property where there is a mortgage, who pays the costs of transfer etc.
A Will is a document in which a person, called the Testator, appoints Executors to administer their estate after their death. The Executors are in charge of collecting all assets, paying any inheritance tax and distributing the estate to the beneficiaries as per the directions outlined in the Will. The document is signed and witnessed and must comply with certain legal requirements to be valid. It is therefore important to seek legal advice to ensure that your Will is valid.