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Wills....

What is a will.

A will or testament is a legal document (declaration) by which a person names one or more persons to manage their estate in the event of death.

Dying without having made a will. If you die without leaving a valid will, you are said to have died intestate and the laws of intestate. Approximately two out of every three people who die in England and Wales die intestate! By Law your estate will be split between your spouse/civil partner and your family, so if you are not married there may be complications on death with the passing of your home and personal belongings.

Do you need a will.

Without a will in place your family will have to obtain letters of Administration and appointing an administrator can take months or sometimes even years. In the mean time your surviving spouse or partner has all the usual household bills and daily expenses to find with the added stress of losing your income. Usually all of your assets are frozen until grant of probate is given where as having a valid will in place will mean your estate and grant of probate can be dealt within three months. It is strongly advised that if you wish your estate to be divided by your wishes to the right members of your family then a valid will must be in place.

Wills in more detail

Why should I make a will?

What makes a valid will?

Who can be a witness?

What does an executor or administrator do?

What is probate?

Will I have to pay inheritance tax?

Who takes charge if there is no will?

Who gets the estate if there is no will?

What if there’s not enough to pay the funeral?

What if there’s not enough to pay the debts?

Key to terms used in wills and probate matters.

Why should I make a will?
When you make a will, you can say how your funeral should be dealt with, and what will happen to your belongings and assets when you die. If you die without making a will (called ‘dying intestate’), it can be complicated to work out who will get what.
The Administration of Estates Act 1925 sets out who can apply to deal with your affairs if you die intestate (called ‘administering the estate’) and how your belongings are to be shared. But several people may have an equal right to administer your estate (for example, your children). When several people are equally entitled to act as administrator, the usual rule is ‘first come, first served’. However, without a will, there may be dispute or uncertainty.

What makes a valid will?
For a person to make a valid will, they must be:

Mentally capable (which means they fully understand what they are doing in writing their will)
At least 18 years old (though you can make a will if you are younger and on active military service but professional advice should be sort).

The will must:

Have been made without ‘undue influence’ (for example, without a threat from someone);
Be in writing;
Be signed by the person whose will it is (the ‘will-maker’ or ‘testator’) and by two witnesses, who must all be together at the signing.
Be dated when it has been signed.

No amendments or additions should be made after the will has been signed.

Who can be a witness?
Any person who is over 18 can sign as a witness. However, the witnesses should not be people who benefit from the will or who are appointed executors (or the husband or wife of one of these people). If you witness a will and you are named as someone who will benefit from it, you will lose your right to that benefit when the person dies.
Special rules apply in certain situations. For example, if a blind person or someone who can’t read or write wants to make a will, you should speak to an adviser to find out more about this.

What does an executor or administrator do?
The executors are the people appointed in a will to deal with the estate of the person who has died. Unlike witnesses, executors can also be beneficiaries of the will. An administrator is the person who deals with the estate of a person who has died intestate (without a will) The executor or administrator may both be called a ‘personal representative’.
If a person has died leaving a valid will, the executors can normally arrange the funeral straight away. However, there may be a delay, depending on how the person died.
The executors can also take charge of the house and possessions of the person who has died unless it passes automatically to a joint owner (for example, the person’s living husband or wife). But if there is a will, they must follow what it says.
The executors must then work out whether they need to apply for probate.
If there is (or could be) inheritance tax to pay, the executors must report the value of the estate to the Capital Taxes Office. Even if the executors believe there is no inheritance tax to pay, they must complete a form giving details of the assets and certain gifts made by the person who died.
The executors may have to deal with claims about unfair treatment if a relative or dependant of the person who has died thinks that what they have been left in the will isn’t fair, or that they have been left out unfairly.
If you are an administrator acting where there is no will and you handle all the matters personally (rather than using a solicitor), you will be personally liable (responsible) if you don’t follow the ‘rules of entitlement’ (the rules governing who gets what) correctly. For example, you cannot give more to someone the dead person liked, or refuse to pay the correct share to someone the dead person disliked, even if the dead person had discussed this before they died.

What is probate?
Probate (or more specifically ‘probate of the will’) is an official form that gives the executors of the will the right to deal with the assets and property of the dead person. When you show the probate form to a bank, for example, they know they are dealing with the person who has the right to handle the estate, and they will allow you to withdraw money from the dead person’s account. However, it is normally possible to get access to the dead person’s money before you get probate if you need to pay inheritance tax.
When you apply for probate, you are promising the Probate Court that you will deal with (‘administer’) the estate as set out in the will and according to law. If you don’t do this, you will be in trouble with the court (and with the people who should benefit from the will). Probate makes sure that the executors carry out their task properly.
When there is no will (or no executors are named in the will, or the executors have died), the official form is called ‘letters of administration’.
Do I always need to get probate?
In some cases, you don’t need to apply for probate. This is when:

the person who has died left very little (say, belongings and money amounting to less than £5,000);
everything they owned was held in joint names with someone to whom their share passes automatically (normally a husband or wife); or
any bank or building society accounts that the person had contain less than £5,000 each (though banks and building societies have the right to insist on probate in this case).

However, you will need to apply for probate if the person who died had:

a bank, building society or National Savings account with more than £5,000 in it;
stocks or shares; or
property or land (unless it is owned as a joint tenancy and so passes automatically to the other owner).

You may have to apply for probate if the person had any life insurance or term insurance policies that are paid to the estate. Some kinds of policy say that they will be paid straight to the beneficiaries of the policy (rather than to the estate), and you don’t need probate for these.
You will have to apply for probate if the person who has died gave away, in the seven years before they died, large gifts or sums of money which, with the person’s other assets, total more than a certain amount (called the ‘nil rate band’). Inheritance tax must be paid on the amount over the nil rate band. The amount of the nil rate band is reviewed each year .
Even if the gifts were not worth more than the nil rate band, their value must be added to the assets of the dead person, because the amount of inheritance tax is based on the value of the estate plus the value of any gifts made in the seven years before they died (excluding certain annual allowances).
There is an important exception to the seven-year limit on gifts: if the person who died gave away their home but continued to live in it rent free (or paid an unreasonably low rent), its value will count towards the assets on which inheritance tax must be paid, regardless of when they gave it away.
In most cases where there is no will you must apply for ‘letters of administration’, which serve the same purpose as probate. You apply for a grant of letters of administration in the same way you would apply for probate. However, as with probate, you may not have to apply for letters of administration if the person’s estate was not worth very much.
How do I apply for probate?
You may apply in person for probate or letters of administration, or you may instruct a solicitor, who can apply on your behalf. You apply to:

the Principal Registry (in London); or
a district probate registry (in other cities and many large towns).

The registry can send you information packs. These include probate application forms and information on how to fill them in. You can also talk to registry staff if you are having difficulty filling in a probate application.

Will I have to pay inheritance tax?
Whether or not you, as the executor, have to pay inheritance tax out of the estate depends on:

how much the property and belongings of the dead person were worth when they died;
the value of any trust from which the person benefited;

the value of certain gifts the person made in the seven years before they died, or longer if they ‘reserved an interest’. (An example of reserving an interest would be if they gave away their house on the condition that they were allowed to live there free of charge or for very low rent until they died.)
If all these add up to more than a certain amount (called the ‘nil rate band’), the estate has to pay inheritance tax at 40 per cent on the sum of money above this amount. The amount is reviewed every year. It is £312,000 for the year April 2008 to March 2009 and will rise to £350,000 by April 2010. For the 2011/12 tax year, no tax is charged on the value of your estate up to £350,000.
Since 2007, if your husband, wife or civil partner dies, you can carry forward any unused portion of their nil rate band and add it to your own nil rate band. However, it is important to know that, if they die without a will and you have children, you will still get only get the first £125,000 (rising to £250,000 from 1 February 2009) outright of their estate. Not all gifts made within the seven-year period have to be included in the tax calculations. All gifts between husbands and wives are exempt from tax, as are those between same-sex partners in a registered civil partnership. You can also make exempt gifts in other ways, including:

a single gift of £3,000 each year;
any number of ‘small gifts’ of under £250 each to different people;
gifts to charities or political parties;
£5,000 to your child if they are getting married; and
gifts that can be described as ‘normal expenditure’ out of your income (which means, for example, that it would not reduce your standard of living).

If you give away your house but continue to live in it without paying a reasonable rate of rent (called ‘reserving an interest’), the value of the house will have to be included in the inheritance tax calculations when you die, even if you made the gift more than seven years before your death.
Inheritance tax is complicated, so you should get specialist legal advice straight away if you are an executor and the probate registry tells you that you may have to pay inheritance tax. The cost of legal advice will be paid out of the estate. If you get the calculation wrong without having taken advice, and you pay the beneficiaries without paying the right amount of tax, you may have to pay what is owed out of your own pocket.
The executors or administrators are responsible for paying any inheritance tax that is due out of the assets of the estate, and it is due six months after the end of the month in which the person died. Some or all of the inheritance tax will have to be paid before you can obtain probate or letters of administration.

Who takes charge if there is no will?
If you, as next of kin (or someone else with similar powers), believe that someone who has died has left a will, but no one can find it, you can take steps to find out if they made one.
These can be:

searching the belongings of the person who has died for any evidence that they made a will (for example, a letter from a solicitor);
phoning or writing to solicitors and banks that the person might have used;
applying to the Principal Probate Registry to see if the person who died left their will there; and
placing advertisements in newspapers and legal journals.

If there is no will, the person’s estate will be shared out under the ‘rules of intestacy’.
These rules set out:

who deals with the estate; and
who benefits from it.

The person who will deal with (administer) the estate is the closest living relative to the dead person, chosen in this order:
1. The husband, wife or registered civil partner of the person who has died (but not their unmarried or unregistered partners).
2. Their children (aged over 18) or their children’s descendants (for example, grandchildren, if they are over 18).
3. The dead person’s parents.
4. The dead person’s brothers or sisters with the same mother and father, or descendants of the brothers or sisters.
5. Their half-brothers or half-sisters (who had either the same mother or the same father) or their descendants.
6. Their grandparents.
7. Their uncles and aunts ‘of the whole blood’ (this means brothers and sisters of their parents, as long as they had the same mother and father themselves) or their descendants.
8. Their uncles and aunts ‘of the half blood’ (this means brothers and sisters of their parents if they had only the same mother or father) or their descendants.
9. The Crown (the state) if there are no relatives.
If several people have an equal right to deal with the estate (for example, brothers and sisters), letters of administration will normally be given to the first of these people who applies for it. However, there can be a problem when, for example, the dead person had several brothers or sisters who all want to be in charge of the funeral or administration. If they cannot agree about this themselves, they must apply to the Probate Court, which will decide who will take responsibility. This process is complicated and you would probably need help from a solicitor.
Remember, too, that legal disputes cost a lot of money and take time to resolve. The costs will probably be taken out of the estate, if the court agrees to this. But otherwise, you risk being left with a large bill.

Who gets the estate if there is no will?
Any inheritance tax must be paid. After that, all debts (including mortgages and other loans) must be repaid, whether the dead person has made a will or not. After that, the Administration of Estates Act 1925 sets out who gets what in every situation where there is no will.
Some of the more common situations are as follows.
If there is a husband, wife or civil partner, but no other relatives
The husband, wife or registered civil partner gets everything (but an unmarried or unregistered partner gets nothing).
If there is a husband, wife or civil partner and children
The husband, wife or civil partner gets:

the ‘personal chattels’ (see ‘Terms used in wills and probate matters’ on page 16);
the first £125,000 (rising to £250,000 from 1 February 2009); and
a life interest (for example, the income or interest if the money is invested, but not the money itself) in half of what is left. The capital (the original amount) passes to their children when the surviving husband, wife or civil partner dies.

The children of the dead person, including illegitimate and adopted children, share between them:
half what is left straight away, if they are 18 or over; and
the other half when the surviving parent dies.
Stepchildren get nothing (unless they are named in a will). If one of the children has already died, leaving children of their own, their share will pass to those children (that is, the grandchildren of the person whose estate is being dealt with).
If there is a husband, wife or civil partner, and relatives (but no children)
The husband or wife gets:

the ‘personal chattels’ (see ‘Terms used in wills and probate matters’ on page 16);
the first £200,000 (rising to £450,000 from 1 February 2009); and
half what is left.

The parents of the dead person, or, if they have died, the brothers and sisters or their descendants, share the other half of what is left.
If there are children, but no living husband, wife or civil partner
The children share everything equally. If one of the children has already died, leaving children of their own, those children will share what their parent would have inherited if the parent had been alive. If the children are under 18, their share will be looked after by personal representatives acting as trustees until they reach 18.
If there is no husband, wife, civil partner or children
Everything will pass to the next available group of relatives, in the same order as that for applying for letters of administration. This means:
1. the parents of the dead person;
2. brothers or sisters of the dead person who have the same mother and father, or their descendants;
3. half-brothers or half-sisters (who had either the same mother or the same father), or their descendants;
4. grandparents;
5. uncles and aunts ‘of the whole blood’ (this means brothers and sisters of the parents of the dead person, as long as they had the same mother and father themselves), or their descendants;
6. uncles and aunts ‘of the half blood’ (this means brothers and sisters of the parents of the dead person who had only the same mother or father) or their descendants; or
7. the Crown (the state).
One common area of misunderstanding is over what happens when a person dies without a will, leaving children or brothers and sisters, but one of these children or brothers or sisters has already died, leaving children or grandchildren of their own. In this situation, those children or grandchildren will get the share that their parent would have got, had he or she been alive.
Similar rules apply so that, for example, where an uncle has already died leaving children, those children will get the share the uncle would have got if he had been alive.

What if there is not enough money to pay the funeral?
By asking a funeral director to conduct the funeral, you make a contract agreeing to pay for the funeral. This means that, if you are the executor or administrator, you should do this only after you have made sure that there is enough money in the estate to pay for the funeral. Otherwise, you should be willing to pay any part of the bill that won’t be covered by the estate.
If you need to arrange a funeral when there is not enough money in the estate to pay for it and you are receiving a means-tested benefit, you may be eligible for a Funeral Payment grant from the Social Fund. For more information about this, or to apply for it, contact your local Job centre Plus (listed in the phone book) and ask for form SF200.

What if there is not enough money to pay the persons debts?
When someone dies, their debts don’t die with them. They have to be paid out of the person’s estate.
If you are administering an estate, you must make sure you have paid all the debts before you pay the beneficiaries. If you are not sure what the debts are, you need to advertise in the London Gazette and a local paper for anyone who may have a claim on the estate, and then wait two months before paying the beneficiaries. The London Gazette is a weekly government publication that contains various legal notices (see ‘Further help’ on page 18 for its phone number).

You could become liable (responsible) for the debts if you pay the beneficiaries without having cleared all the debts first. You may also have to submit a tax return for the person who has died.
If there is not enough money to pay all the debts, they must be paid in a particular order:
1. the funeral expenses and ‘testamentary’ expenses (those to do with dealing with the will);
2. any debt secured by a mortgage on property;
3. HM Revenue and Customs;
4. the Department of Work and Pensions, who deal with social security (you may have to refund any over-payment of benefits);
5. unpaid pension contributions or wages.
If all the debts can be paid, but there isn’t enough money left to pay everything set out in the will, the legacies (those where a specific amount is mentioned) will be paid first, and the other people mentioned will get what is left over.
If there is not enough to pay all the legacies, the people entitled to the legacies will get a proportion of what they have been left, depending on how much money is available. The other people mentioned in the will, who are supposed to get the remainder, will get nothing.

Terms used in wills and probate matters
Administrator The person who deals with (administers) the estate of a person who has died intestate (without a will).
Bequest A gift of a particular object (for example, an item of jewellery).
Child In will or intestacy matters, the children of the person who has died include adopted children and illegitimate children (children born to parents who were unmarried), but not their stepchildren (unless they are specifically mentioned).
Common-law spouse This term has no legal force, although a partner who lived with the person who died for two years before their death might be able to claim a share of the estate.
Devise A gift of a house or land.
Demise A lease of a house or flat.
Estate All the assets and property of the person who has died, including all houses, cars, investments, money and belongings.
Executor The person appointed in the will to deal with the estate of a person who has died.
Inheritance tax The tax that may have to be paid when the total estate of a person who has died is more than a certain amount (currently £312,000).
Intestate Without a will, or a person who dies without having made a will.
Issue All the descendants of a person (children, grandchildren, great-grandchildren and so on).
Legacy A gift of money (usually a specific amount).
Letters of administration The document issued to the administrators by the probate registry to authorise them to deal with the estate.
Life interest The right to receive the income or benefit from a property or capital sum (but not to get the capital sum itself) for life.
Minor A person under 18.
Next of kin In will or intestacy matters, the person entitled to the estate when a person dies intestate (without a will).
Nil rate band The value of an estate up to which inheritance tax is not payable.
Personal chattels Personal belongings, including jewellery, furniture, wine, pictures, books and cars (but not money, investments, property or business assets).
Personal estate (personalty) All the investments and belongings of a person apart from land and buildings.
Personal representatives A general term for administrators and executors.
Probate of the will The document issued to executors by the probate registry to authorise them to deal with the estate.
Proving the will Making the application for probate to the probate registry.
Probate registry A court within the Family Division of the High Court which deals with probate and administration matters. The Principal Registry is in London and there are district registries in other cities and some large towns.
Real estate (realty) Land and buildings owned by a person.
Remainder man The person who gets the property or capital sum after the death of the person holding a ‘life interest’.
Residue What is left to share out after all the debts, inheritance tax and specific bequests and legacies have been paid.
Specific bequests Particular items gifted by the will. They may be called ‘specific legacies’.
Testator A person who makes a will. Testatrix is sometimes used to mean a female will-maker.
Will The document in which you say what will happen to your money and possessions on your death

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