1. What happens if I do not make a will?

It becomes necessary for your closest relative to apply to the Probate Court for what is called "Grant of Administration". If the Court is satisfied with the formal documentation lodged with them, a sealed court certificate (called "Letters of Administration") will be issued and that will be full authority for the named person to collect in the assets of the deceased.

There is a strict "pecking order" of beneficiaries depending upon whether the deceased left a husband or wife and whether or not there were children. If for example there is a widow and there are children then the first £125,000 of value is paid to he widow plus the personal household items and the rest of the estate is divided into two halves:

one half is shared immediately between the children and the other half is held on trust so that the widow receives the income for life after which it is divided between the children. This usually is a most unsatisfactory arrangement and can have very unfortunate financial consequences for the widow. It would be the direct result of the deceased having failed to protect his family by making a will.

2. Is it expensive to make a will?

The charge for a simple will should be about £100 plus vat. It will, of course cost more if you have complicated requirements involving trusts, life interests etc. The legal charges involved are relatively insignificant when compared (in some cases) to the tax saving that can be achieved but in all cases to the distribution of your assets in accordance with your wishes and not some rigid and often irrelevant intestacy rules.

3. How can I avoid paying inheritance tax of 40%?

Firstly of course you must make a will because Inheritance Tax mitigation is virtually impossible otherwise (except by giving assets or money away during your lifetime and successfully surviving seven years). At the present time every individual has a tax free allowance of £255,000. If the estate is less than that figure then there is no tax payable at all.

It should be observed that as husband and wife each have an allowance of that figure, then between them they should avoid paying tax on a total of £510,000. There is also an exemption from tax relating to any sum left by husband to wife or vice versa. If on the first death however the entire estate is left to the spouse then at the time of the second death the pair have only used one of their £255,000 exemptions and this could lead to the payment of an unnecessary £100,000 in tax.

Each individual will need to consult in some detail with his or her solicitor on these points. There are other allowances against Inheritance Tax, which can be discussed at that time.

4. What is an executor?

After having decided on the individuals who are going to benefit under your will, you have to appoint someone you trust to carry out the administration work and to put your wishes into effect. That executor could be any person you choose to appoint whether family friend or professional person.

You could even appoint your bank (although you would be dismayed to learn how much your bank would take out of your estate as payment for their services!). Normally the executor carries out his duties free of charge except where you choose to appoint a solicitor or other professional person.

5. Who should I appoint as executor?

By far the best person is a close relative or a major beneficiary of the will.

6. Why should I bother making a will?

The answer can be seen in the points raised above. Without a will you could be creating serious financial problems for your widow by depriving her of funds needed to maintain her standard of living. You could be paying very substantial sums in Inheritance Tax that could have been avoided; and you will have given up the opportunity to make individual specific gifts to persons you would have preferred to "remember" in your last will and testament.

7. How should a will be signed?

The formalities are extremely rigid. Two witnesses who are not beneficiaries must actually be present with you when you sign and they themselves must sign as witnesses in the presence of all three of you. A mistake in this respect cannot be corrected after the testator has died.

8. What exactly is involved on an application for a grant of probate?

Estates vary in their constituent assets and in value generally. The Executor will probably need the help of a solicitor who will firstly investigate all assets in order to calculate the estate value and this may entail the engagement of a professional property valuer or accountant where a business is involved. After that the application forms need to be prepared and signed by the Executor including in particular an oath to be sworn by him confirming the facts of the application generally and undertaking to carry out his duties lawfully. Details must be supplied to the Capital Taxes Office of the Inland Revenue and all Inheritance Tax paid at that stage. Only when you have a clearance and tax receipt can the matter proceed further to an application to the Probate Court.

9. What do solicitors charge for probate work?

This varies from firm to firm. Some charge as much as two and a half percent of the estate plus a time charge. Beesley & Company will normally charge half a percent plus a time charge of £150 per hour but this will need to be negotiated between solicitor and client on each occasion. It is likely to be higher on a complicated estate.

Last updated on: 11 March, 2008

Questions on Will and Probate