Whatever you leave when you die is called your estate. It’s made up of everything you own (or your share of things you own jointly), minus everything you owe (debt).
If you die without making a will, the law decides who will inherit your estate. The law favours a husband, wife or civil partner and your children (including adopted children but not step-children).
What you leave may be split between your spouse or civil partner and children.
An unmarried partner has no legal right to inherit anything. But they may be able to apply to a court for financial support from your estate. Other relatives and friends may also be able to do this.
If you don’t have a husband, wife, civil partner or children, your estate may go to your parents or siblings (depending on which UK nation you live in). If there are no relatives, the state gets everything. This may not be the way you would like to leave your money and possessions, so writing a will could be very important.
Younger people and wills
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If you live in England, Wales or Northern Ireland, you have to be at least 18 to make a will. If you live in Scotland, you have to be at least 16.
If someone dies before they are old enough to make a will, the law decides how their estate is passed on. If they were married, their husband, wife or civil partner will normally inherit everything. Otherwise, their parents will normally inherit everything. Their estate might include money that has been invested for them in a Child Trust Fund or Junior Individual Savings Account (JISA).
By writing a will, you can make sure your estate goes to the people you want it to. It also means the people you care for can go through less complicated financial processes to access your estate.
You can also use a will to appoint people called executors to sort out your estate. If appropriate, you can use your will to appoint guardians to take care of your children. And you can use a will to arrange your tax affairs.
In Scotland, if you leave behind a husband, wife, civil partner or children, they automatically have a right to claim part of your estate. This applies whether or not you have written a will. These are called Legal Rights.
You can write your own will. But unless your affairs are very straightforward, it’s safer to use a solicitor, as this could reduce the risk of problems or disputes in the future. When you’re looking for a solicitor, you should shop around for the best deal.
You can’t get financial help through the legal aid system to help pay for the cost of writing a will with a solicitor. Some charities, including Macmillan, offer a free or reduced-cost will-writing service. If you’re a member of a union, you may be able to get a free or reduced-cost will written through their legal services.
We have more information about making a will. Making a will can vary across the four nations of the UK (England, Wales, Scotland and Northern Ireland). Visit our Advance care planning section to find information for your region.
You may also find it helpful to see our financial tool for more information about financial issues and cancer at finance.macmillan.org.uk
Some charities offer a free will-writing service. They hope you will use your will to leave them a gift (a legacy), but you don’t have to. If you use a will-writing service, it’s always a good idea to speak to an independent solicitor.
Macmillan has a discounted will-writing service. We have chosen a range of will-writing organisations you can trust and that can offer you a reduced price. You don’t have to leave a gift to Macmillan to get a discount. Find out more about our discounted will writing service.
There are several other ways we can support you to make or update your will, including helping you leave us a gift if you want to. We have legacy advisers in your area who can call or visit you for a confidential chat. To find out more, call us on 0800 107 4448, visit macmillan.org.uk/legacies or email email@example.com
There are different ways of finding charity will-writing services:
You can contact a charity to find out whether it offers a free will-making service.
Two free or low-cost charity will-writing services include willaid.org.uk and willreliefscotland.co.uk
For a list of charities that offer a free annual will-making service to people aged 55 and over, visit freewillsmonth.org.uk
Jointly owned possessions
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You may own something jointly with one or more people.
There are two ways of owning things jointly.
Note that the terms used for people who own something jointly are the same in England, Wales and Northern Ireland, but different in Scotland.
Joint tenants, or joint owners in Scotland
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This is where more than one person owns the possession (asset) and they all have an equal share. When you die, the survivor(s) will inherit your share.
Joint bank and savings accounts are always owned in this way. Transferring money to a joint account is a simple way to make sure your partner has immediate access to cash if you die.
Tenants in common, or owners in common in Scotland
This is where each owner has their own share of the possession. The shares do not have to be equal. When you die, your sharewill become part of your estate. This means it will be passed on in the way you’ve written in your will. Or if you don’t have a will, it will be passed on in the way the law says.
Some money from your estate may be taken by the state as inheritance tax. But a certain amount of your estate can be inherited tax-free. This is known as the tax-free allowance. It’s also called the nil rate band. The tax-free allowance is currently £325,000. This amount is not due to be reviewed until 2018.
However big your estate is, there is no tax on anything you leave to:
your husband, wife or civil partner (in most cases)
charities (in most cases).
You can find out how much inheritance tax you may be liable to pay by using our inheritance tax calculator.
If your estate is less than the tax-free allowance
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A proportionate share of your remaining tax-free allowance can be transferred to your husband, wife or civil partner if you have one. This means it would be added on to their tax-free allowance when they die. This would potentially allow more money to go to the people they name in their will.
The tax-free allowance is not transferred until after the surviving partner has died. Their executor or personal representative would have to apply for it. They would need paperwork showing how much tax-free allowance was used following your death, so these documents should be kept safely.
If your estate is worth more than the tax-free allowance
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You may want to look at ways you can make gifts in your lifetime.
You might also be able to arrange your will in a way that reduces any tax bill. Under the current rules, if you leave 10% or more of your estate to a charity, the rest of your taxable estate (anything over £325,000) will be taxed at 36% rather than 40%. Whatever you leave as a charitable gift will not be taxed.
Making lifetime gifts can reduce the value of your estate when you die. This reduces the inheritance tax on it. Lifetime gifts that are tax-free include the following:
Gifts to your husband, wife or civil partner (in most cases).
Gifts to charity.
Wedding gifts, up to specified limits.
Regular gifts of any amount that you pay out of your income, for example monthly payments to someone or regular gifts for Christmas. These gifts only count if you have enough income left after making them to live your normal lifestyle.
Any number of small gifts up to £250 per person.
Up to £3,000 of any other types of gift you make each tax year, on top of the gifts mentioned above.
Most other gifts you make are only tax-free if you live for seven years after making them. If you die within seven years, they count as taxable gifts. But the tax charges can be reduced if you die more than three years after making the gift.
Some gifts are taxable anyway – in particular, gifts to most types of trust. But this is only if you’ve given more than £325,000 in any seven-year period.
When you die, your tax-free allowance (currently £325,000) is first set against the taxable gifts you made in the last seven years of your life. Then the rest of it is set against your estate.
For example, if you left an estate worth £300,000 and had made taxable gifts of £100,000 during the last seven years, the gifts would use up £100,000 of the allowance. This would leave £225,000 to set against your estate. This means £75,000 of the estate would be taxed.
More information about inheritance tax
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For more information, visit gov.uk/inheritance-tax You can also read the latest information about inheritance tax at hmrc.gov.uk/inheritancetax
For advice about inheritance tax, speak to a financial adviser or solicitor who specialises in estate planning. To set up a trust, contact a solicitor. If you have a substantial estate (for example, worth more than £1 million), you might want to get specialist advice from a member of the Society of Trust and Estate Practitioners.
You can get an estimate of the amount of your inheritance tax by using our online inheritance tax calculator at finance.macmillan.org.uk/inheritance-tax
A funeral plan lets you arrange and pay for your own or someone else’s funeral in advance. You pay either a lump sum or instalments, to the plan provider or a funeral director. There are safeguards to make sure your money is safe until it’s needed.
Before you buy a funeral plan, check what the total cost will be and what will be included in the package to make sure you’re happy with the deal. For more information, visit moneyadviceservice.org.uk/en/articles/funeral-plans
We also have more information about funeral planning in the four nations of the UK (England, Wales, Northern Ireland and Scotland). Just visit the Advance care planning section of our website and select your region.