The way in which your estate is distributed under intestacy laws could produce an outcome very different to your wishes.
A will allows you to decide who will benefit from your money, property or possessions following your death. It can be used to achieve a fair balance between those close to you and, where desired, to grant certain rights to some – eg the right to occupy a property – whilst protecting the ultimate ownership for others.
Making a will also assists in passing on assets in the most tax-efficient way. All estates are exempt from inheritance tax (IHT) up to a certain threshold, or nil rate band, currently set at £325,000 until 2017-18. Above this level, IHT is levied at 40 per cent of the estate’s value.
Civil partners and spouses can pass assets to each other during their lifetime or when they die without paying IHT, providing the person receiving the assets has their permanent home in the UK.
If someone leaves their whole estate to their surviving civil partner or spouse, not only is it exempt from IHT, it also means they have not used any of the IHT nil rate band and this can be used to increase the IHT threshold of the second civil partner or spouse when they die.
For more information on our same sex marriage and civil partnership legal services, please contact Palmers’ family law team in Essex.