WRITING A WILL - A COMPLETE GUIDE

Do I need to make a will?

For most people the thought of making a will is depressing, confirming the inevitability of our fate, and because of this it is often put aside for another day. Granted such a gloomy task is hardly inspiring. However, sooner or later the task has to be done as it is an essential part of administering your personal affairs and taking responsibility.

Most people own their own car, have household furniture, bank and building society accounts and a growing number own a house, and some a second home from either inheritance or purchase, and add to that the ownership of shares, pension assests, time shares, insurance policies and other assests.

By making a will you are directing who should receive your possessions following your death. Without one you are considered to have died intestate and the intestacy laws apply. In Scottish and English law if there are no traceable surviving relatives then all of your possessions, in other words 'your estate', less any debts or liabilities, go to the Crown. The Government will take the lot, this may mean friends and a "lost" relatives get nothing... treasured possesions sold for a pittance to "house clearers" and all those hard earned assests...

The greater percentage of the population at present do not bother to make a will. How many times have you said: 'I do not have that much to leave, so why bother to make out a will?' Or, 'There is only this house and my car, so it is not necessary' Or, 'Why should it concern me who will get what? I will, after all, not be around.' Or, lastly, 'Estate planning? I won't have to pay the tax.'

The wealth of this nation has dramatically increased over the past 20 years. It is not just the privileged few who have money and assets to leave to their family and friends. The increase in house prices was one of the most significant adjustments to personal wealth in the 1990's and into the new century; in increasing numbers the second generation are inheriting a property in addition to owning their own. And a few may own yet another property, which is rented out. Indeed a study by merchant bankers Morgan Grenfell showed that the annual number of inherited properties rose in the last decade by one-third to 128,000.

The value of inherited property quadrupled to £8.5 billion with the long-term forecast showing that this will rise even further in the next two decades as 21 million people (86 per cent of them pensioners) will be home owners. The predicted windfalls are estimated to total £35 billion a year!

When you add to this value even modest savings, insurance policies, pensions and so on you can easily see how the inheritance tax threshold of £255,000 means that 1 in 45 persons will be affected. (Remember inheritance from your deceased spouse has no inheritance tax.) Therefore, despite this increase, it does not mean that estate planning can be forgotten. For example, should a married couple hold an estate jointly and its value is over £255,000, then unless they take precautions, the surviving person's estate on their death may attract inheritance tax at the current rate.

Inheritance tax is generally regarded as a tax on middle England as the wealthy take great care to provide for continuity of wealth in future generations. The middle classes are more reluctant to prepare for this tax, considering the expense in their lifetime, with the end result that most of the contributions to this tax come from the middle classes.

For those of you undecided on estate planning, the number of estates liable to inheritance tax has also increased to over 25,000 a year. If you own a property, consider its value today, next year, next decade...

For those readers who are collectors of works of art the Inland Revenue have produced a conditionally exempt works of art register. Conditional exemption from inheritance tax may be granted for works of art and other objects, such as pictures, prints, books, manuscripts and scientific collections which are of national, scientific, historic or artistic interest. The rules for this conditional exemption are that the owner must keep the object in the United Kingdom and allow reasonable public access to the object. Readers can gain further details by obtaining booklet IR67 entitled 'Capital Taxation and the National Heritage' from the Capital Taxes Offices.

A growing number of couples now choose to live together outside marriage. This figure is estimated to be over one million. Many items, such as the house, are bought jointly. However, until the Law Reform (Succession) Act 1995, which came into effect on 1 January 1996, it meant that the surviving co-habitee did not as of right receive any portion of the deceased's estate unless provision had been made in the will. Under this new Bill, the surviving co-habitee can claim financial provision from the deceased's estate.

Problems can occur when writing your own will. The most frequent problem with DIY wills is that they are not worded clearly. Other errors can occur. For example, in Scotland a will, apart from the signatures of the witnesses, must also include the witnesses' full details such as names, addresses and occupations. Again, in Scotland, if the will is handwritten by the testator, ie a holograph will, witnesses are not required.

A will does not come into effect until death has occurred. A testator does not become a testator until he or she dies, nor does an executor become an executor until this happens. So until this event the contents of a will and a will itself can be changed. If there are minor alterations, these changes can be inserted in the form of a codicil. If changes occur frequently or if they are major ones, it is better to write a new will. Remember, if a new will is drawn up, the old one must be destroyed, provided, of course, that you are satisfied that the new one has been drawn up properly and signed and witnessed correctly with the important statement at its beginning

'I hereby revoke all former wills codicils and testamentary provisions at any time made by me and declare this to be my last will.'

You can also include in your will any specific arrangements you may wish to make regarding your own funeral. Or perhaps you may wish to donate your body to medical research or organ donation. Your wish with regard to organ donations needs to be known by those closest to you in order to fulfil your wishes. So a will is used not only for listing who should receive what asset from your estate but also for any other wishes you may have. Your executor should also be made aware of certain provisions in your will, namely funeral arrangements.

If there is a rule when writing your own will it must be to keep it simple. Do not stray into legal technicalities. Instead, set out what gifts are to be made, clearly identifying all objects and stating who should receive them.

Since 1964, even if you hold a foreign passport but are still permanently resident in this country, there is no distinction in law between owning property in the United Kingdom (under English law) and leaving it in your will to a person who resides abroad. Property can also be held overseas and left to someone residing in this country.

Distribution of immovable property held overseas has to be carried out in accordance with the law of the land in which that property is situated. This should serve as a reminder, when purchasing property overseas, to enquire what inheritance tax laws apply there. Legal advice in such cases should always be sought.

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