2010 - 2017
Making a Will is not about wealth it is about making sure that what you want to happen to your estate does happen. It gives you the opportunity to specify such things as who will administer your estate, who will care for your children and who will receive specific items of your property.
At one time only the upper classes paid death duties. The ordinary man in the street never had to worry his head about such matters.
Unfortunately, the rise in home ownership coupled with the increase in house prices has led to a large increase in the number of estates paying tax. The Chancellor of the Exchequer fixes a starting point for inheritance tax in his annual budget. The amount below that starting point is referred to as your 'nil rate band'.
If your estate goes over that limit you will pay tax on the excess. The important thing to remember is that inheritance tax is by and large a voluntary tax; it is perfectly acceptable to write your will in such a way that the tax is reduced or eliminated.
The most basic form of tax planning for husband and wife is to set up discretionary trusts of your nil rate bands in each will. This ensures that you both take advantage of your nil rate bands.
Anything passing from one spouse to another is currently exempt from inheritance tax but passing everything to your spouse can lead to the accumulation of wealth in the survivor's estate. The resulting tax bill can be very big indeed. Where nil rate band trusts are set up the saving in tax can be substantial.