The Lawyer dot com reported on Monday that recent changes to the inheritance tax threshold have the potential to make Wills an easier sell then ever.
Although at first sight it would appear that the new provisions mean that people no longer have to make a Will to save on inheritance tax this is not true in all cases. The estate of a married couple or civil partners passing on intestacy can have an adverse effect as far as inheritance tax is concerned. Under current law it is possible to circumvent the impact of inheritance tax on intestacy by a deed of variation but these may not be available in the
future.
The situation that has been created by the softening of the Government’s attitude towards inheritance tax effectively increases the problem that the profession has always faced in encouraging people to put their affairs in order. The statistics showing that around 70% of the adult population die without a Will have been around for years and do not seem to have improved. This is surprising as the general wealth of the population has increased.
Using Trusts to Protect Assets Although the main reason for including nil rate band discretionary trusts in Wills has generally been for inheritance tax saving purposes this article reiterates other reasons for their use such as protecting assets from the bankruptcy or divorce of a beneficiary or the flexibility of skipping generations to keep the assets out of the estate of a wealthy child.
While these reasons clearly do still exist by comparison they seem less compelling as none of them have the same immediate fear factor of paying tax that need not be paid. The article encourages price flexibility within the profession stating that these changes make it potentially simpler and cheaper to make a Will while retaining the same inheritance tax savings as before.
