Before you draw up a will you should think about what would happen to your partner or spouse if you were no longer around.
The rules around who gets what if you die without a will are complicated (they’re called ‘intestacy laws’). They certainly don’t guarantee that your husband, wife, or civil partner would inherit everything and, if you don’t have children, your money and property could be split between your spouse/civil partner and your parents or other relatives. If you’re not married you have no automatic right to inherit at all.
Would they have sufficient income and capital (lump sum) to maintain their current standard of living?
Would they need someone to help them sort out all the paperwork and administration after bereavement?
This is what an executor does. You can ask friends or family members to act as your executor (you don’t need to use a solicitor). If your affairs are very complicated it may be a good idea to involve a solicitor but your executors can ask for their help as and when they need it. If you use a solicitor as an executor, ask them how much they charge. Some charge a ‘value element’ – basically a percentage fee based on the value of everything you leave behind.
You don’t pay inheritance tax while you’re alive but it has to be paid out of the money and property that you’ve left for your relatives. At the moment, the first £325,000 of your estate is free of inheritance tax and because married couples and those in a civil partnership can transfer the allowance to each other, it effectively means they can leave £650,000 between them free of inheritance tax. There’s also a main residence allowance, which applies in addition to the existing nil rate band, but only where the person who has died is transferring a property that was once their home, to their direct descendants (i.e. children or grandchildren). The residence nil-rate band is currently £175,000, having increased to this limit in April 2020.
You can transfer this extra allowance to your surviving spouse when you die if you haven’t already used it. This means that in the current 2021-22 tax year, a married couple could potentially leave their children a combined estate of up to £1m, without facing an inheritance tax bill. You can find out more about how inheritance tax works in our guide Understanding Inheritance Tax.