Nil Rate Band Trust Wills
Nil Rate Band Trust
The death of you or your partner can have an impact on the taxation of your/their estate, and taking into account current property values, more and more of us will be liable to pay inheritance tax on the estate.
The Inheritance Tax threshold currently stands at £325,000 (frozen until 2019), over which all would be taxed at the 40% rate on any inheritance monies over the threshold amount (after funeral costs etc. are covered).
This threshold can quickly be surpassed, even by people on modest incomes if there is a property involved in the estate. So, you ask yourself, is there anything my partner or I can do with our wills to minimise the amount of 40% inheritance tax our estate would be liable for?
Yes, there is: you can prepare an NRBT which will help the living partner minimise how much 40% inheritance tax is due from your estate. Click here to find out why you should choose us for will writing service!
How a Nil Rate Trust can help you
This will arrangement is a helpful tool that comes into play when a married couple wants to bequeath what remains of their estates to each other, while at the same time ensuring that each makes the best of their inheritance tax allowance.
Circumstances are often such that a husband and wife may have individual funds, but the funds are required by the living spouse to live in a comfortable manner after their partner’s death. Click here to find out what happens if you die without a will!
In such cases bequeathing funds to children and suchlike may not be a feasible option. Should an additional property be part of the estate, no tax would be payable on a property left by one spouse to the other, until the living spouse dies: at which point the total joint estate is liable for the tax.
Conversely, circumstances may be such that a spouse bequeaths funds to their family, and when they die, the £325,000 nil rate band tax amount to which they are entitled, plus that of the remaining spouse could then be utilised when he or she dies. See our Prices!
However, if the entire estate is bequeathed to the living spouse, any advantage of the first spouse’s Inheritance Tax allowance is in effect lost.
More about Nil Rate Band Trust
Nil rate band can also be referred to as the inheritance tax (IHT) threshold. This is the amount of money up to which tax is not deducted from the inheritance money that is left on a will (Nil tax). Nil rate band(NRB) is simply the amount of money up to which the state does not impose IHT on. Since April 2017, the amount was set to £325 000. For up to this amount nil tax is charged on IHT. For any amount exceeding this, a rate of 40% is charged as inheritance tax.
The nil-rate-band applies on the whole estate left behind after passing on. This also includes all the taxable gifts given within a period of seven years before death. This means that if there was property given to family seven years prior to death of the owner, IHT is imposed. For any amount up to £325 000, there is nil IHT but the extra has to be deducted with a rate of 40% taxed known as IHT. Nil rate applies when the band is below IHT threshold. Click here to see more about our blogs!
What you need to know:
This is where a NRBT can help upon the death of a spouse:
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To find out more about our will writing service all you have to do is give us a call. One of our friendly team members will chat with you about your personal circumstances and what you wish to include in your will. We will then schedule a visit, at a time of your choosing, for one of our Legal Consultants to come and visit you
They will gather all of the necessary information together in order to prepare and write your will. Once this stage has been completed you will then receive your completed will for approval. The whole process takes an average of 28 days. To find out more information please do give us a call today. We offer a fixed fee and guarantee the lowest local will writing prices.
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Writing wills is the only way to ensure that your money, possessions, property, as well as your investments, has gone to the people or the causes that you care of.
How to write a will
Find out the value of your property. You can draw a list of your lasting assets and your debts too.
The assets that usually make an estate are
- motor vehicles
- your company
- your home, furniture and other household pieces of stuff
- all your savings (bank/building society accounts)
- pension funds
- investments like stocks and shares
- other property that you own
- other personal belongings registered under your name
Then calculate the amount of debt you have. Debts may be a mortgage, a bank overdraft, a credit card balance, loans or equity release. These assets should be valued on a regular basis since their value keeps changing over time. To clarify this you can contact the people responsible to know how long lasting they are.
The will should be transparent regarding your assets. Ensure you have stated well who you would like to gain from your will. Decide where the remains of the assets will go (any money or property that is generally left after meeting the funeral along with administrative expenses, taxes, and legacies). State what to be done if one of your beneficiaries dies before you. If you desire to give any particular gifts to specific individuals like charity, ensure that you have included the correct information like the full names, addresses, and the charity’s registered number. Erroneous information might make your chosen charity to be denied the gift. This is a long lasting decision make sure it is satisfactory to you.
Executors deal with the distribution of your assets once you are dead. It involves a lot of work and accountability, thus think about the people you appoint cautiously.
It’s now the time to write your will
Make your own will:
Make your own will and ensure that it is valid. It should be correctly drafted and signed.
It is typically best because they offer legal advice. Look for one who specializes in wills. Ensure that they are registered with the relevant body.
Some of the banks have will-writing services as well as advice regarding asset planning.
Professional wills writers:
these are not qualified solicitors; hence, they might not be regulated. Do thorough checks if they are registered before you choose one? You do not want to mess up because of less research on solicitors.
Ensure your will is valid
Your will should be in writing, and only you should sign it and witness by at least two people who should as well sign it in your presence. You should have the mental capability of making the will and also understand the effect that it will have. Finally, you should make the will willingly and not from anyone else pressure. The beneficiaries, their family or civil partners are not supposed to act as witnesses; otherwise, they will lose their right of the inheritance. They are not even supposed to be present when the will is being signed. It is not advisable for an executor to be a witness.
Making a will in sickness
The will can be signed on your behalf if you are not capable provided that you are in that room and you have the mental capability to make the will. It should contain a clause stating that you understood everything prior to signing it. In case of a severe ailment, you might require a statement from a medical practitioner certifying that you have understood what you are about to sign then you can get an attorney. You can as well appoint somebody else to have a short-term power to sign your legal documents by giving them a general power of Attorney.
Keep updating your will
You are supposed to review your will after every five years or after a significant change like a moving house or new grandchild, and you should never make changes to the original will. For minor amendments, you can add just an addition, called a codicil that must be signed and witnessed just like the will, even though the witnesses don’t need to be the same. For significant changes like remarrying or divorce, the will requires to be changed. You must make a new one and cancel the previous one.