Colin Murphy: Myths of Wills and Probate

Today’s speaker was Colin Murphy, from our corporate member Backhouse Solicitors, who spoke about wills, probate and lasting powers of attorney.

Any adult who has the mental capacity to understand what it is they are signing can make a will. The will must be in writing but it does not have to be in English. It can even be in code provided a key is available. The testator’s signature must be witnessed by two independent adults, unless he or she is on active duty in the armed services, when these rules are relaxed.

A will can be revoked by physical destruction or by making a later will. There is actually no legal requirement to date a will but it is highly desirable to avoid arguments as to which is latest in time. A will is revoked automatically if the testator subsequently marries, unless it is specifically stated in the will that it is made in contemplation of that particular marriage. Perhaps surprisingly, a will is not automatically revoked if the testator gets divorced.

In contrast with the law in some other countries, notably France and Spain, the testator is under no legal obligation to leave any assets to a spouse or descendants. The executor can be a beneficiary under the will.

The first £325,000 of a person’s estate is free of inheritance tax. Above that figure inheritance tax is payable at 40%. However, there is a further tax-free amount of £175,000 on a home left to children or grandchildren. Assets left to a surviving spouse are completely tax free and any tax-free amount unused on the death of the first spouse can be added to the second spouse’s tax-free amount. Effectively this means that between them a couple can leave their home to their descendants tax-free up to £1,000,000. All assets left to charities are completely tax-free.

Inheritance tax must be paid before the executor can obtain probate but some banks will accept instructions to pay this from the deceased’s bank accounts directly to HMRC even though probate has not yet been obtained.

The death of someone who has not made a will causes complications because there is no named executor and property will be divided according to the laws of intestacy, which may or may not coincide with the deceased’s wishes. If someone who has been cohabiting dies without making a will the surviving partner may have no claim on the estate whatsoever.

It is also advisable for people to take out lasting powers of attorney so that someone of their choice will be able to look after their affairs if they should lose the mental capacity to do so for any reason. Lasting power of attorney are of two types, one granting the attorney powers over the granter’s financial affairs and the other granting the right to make decisions about social and health matters.