Trusts

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Making a will allows a person to leave specific instructions as to how their estate should be distributed on their death. A valid will must be in writing and must be signed by the testator (the person making the will). The testator’s signature must be witnessed by two or more independent witnesses who must not be b...

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...with nothing, intestacy rules make no provision for unmarried partners

A will enables a person to pass on their estate to the people they really want to benefit instead of to individuals and in proportions determined by legislation under the laws of intestacy

The estate should be administered more easily and more quickly, and specific provision for minors can be made if there is a will in place

When a person dies leaving a valid will, the executors nominated within the will are required to administer the estate. <...

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...ears) exceeds the IHT nil rate band, tax will be due and, generally, this must be paid before grant of probate is issued.

A mutual will is where two or more people agree to execute a separate will disposing of their property in the same way. In other words, each will is identical (or si...

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...tipulation that the last survivor’s will remains unchanged after the death of the first to die. For this reason, they are generally favoured over mutual wills.

A deed of variation is used to change or vary the arrangements of a will - or even intestacy - post-death. It does not change the will itself, but simply changes who benefits from the estate due to the original beneficiaries giving...

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...ives if the variation has the effect of increasing the amount of IHT payable

- The legal personal representatives can refuse to sign if they do not have the funds to pay the IHT

Not be done for money or money’s worth

Disclaimers and the rules governing them are similar to deeds of var...

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...entitled to benefit under the terms of the will, trust or intestacy.

The following situations can result in a will being revoked:

Marriage or civil partnership - in this event, any previous will is revoked unless it is made with a marriage or civil pa...

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...nce, a person can apply for financial provision out of the deceased’s estate on the grounds that the deceased’s will does not make a reasonable financial provision for them.

If a person dies without leaving a valid will, they are said to have died intestate. The rules of intestacy which are governed by the Administration of Estates Act 1925, as amended by the Inheritance and Trustees’ Powers Act 2014, are very specific in respect of how the estate is to be distributed. 

England & Wales

If the deceased was married or in a civil partnership, with no children, their spouse or civil partner will receive the entire estate of the deceased

In addition, the spouse ...

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...operty held at the time of death of the intestate solely as in investment

Deed of variation for an intestate estate

Sometimes, where the deceased has not left a will, the distribution of the estate under the law of intestacy may not be tax efficient. Furthermore, the distribution may not be how the family members believe the deceased person would have wanted their assets and belongings to be shared. A deed of variation is possible, just as it is where a will exists, to alter the distribution accordingly.

The standard nil rate band is £325,000. Since 9 October 2007, it has been possible for the percentage of a spouse’s or civil partner’s IHT nil rate band remaining unused on their death to be transferred to their...

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...ore than one nil rate band, though the maximum transferrable nil rate band is 100% of the nil rate band available in the year of the surviving spouse’s death. In other words, their nil rate band cannot be more than doubled.

Since 6 April 2017, each individual has an additional Residence Nil Rate Band (RNRB) to add to the regular nil rate band where they leave residential property to lineal descendants. This includes the decea...

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...at a rate of £1 for every £2 over the £2m threshold. That means that estates in excess of £2.35m in tax year 2026/27 do not benefit from the RNRB [£2m + (2 x £175,000)].

When a person dies, their personal representatives are responsible for paying any debts of the deceased, including any liabilities to income tax and capital gains tax, and for settling any inheritance tax due on the estate.

In respect of income tax, the personal representatives are responsible for paying tax due on any income received by the deceased up to the date of death, after applying the normal allowances and reliefs. The tax is calculated as if the person was still living. It is possible that the deceased may be entitled to a tax refund.

Where income is ...

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...ief is available which reduces the amount of IHT payable; taper relief is calculated on a sliding scale after the first three years from the date of the transfer. Some other types of gifts are ‘chargeable lifetime transfers’. A lifetime charge to IHT, at a rate of 20%, may have applied at the date of the transfer, if the individual does not survive a full seven years since the date of the transfer, further tax may be payable on death. Taper relief is available in the same way as in respect of PETs but no repayment of any lifetime charge to IHT is made.