At Homeward Legal we understand that buying a house is a huge investment, particularly if you are a first time buyer. While our focus is on conveyancing, we want to help you keep your property in the family as long as possible which means thinking about making a will, so we've teamed up with Best Value Wills to give you all the info you need to keep your property in safe hands.
Why should I make a will when buying property?
You may only be at the purchase stage, but buying a property is one of the biggest investments you'll ever make and it increases your assets hugely. Unfortunately, we can't take these things with us when we die, but we can decide who they are passed onto. While it might seem premature, statistics show that now is one of the most popular times to make a will, which makes sense after spending hundreds of thousands of pounds. It's a worrying thought that if you happen to die without a will in place, the future of these assets becomes uncertain. When someone dies without making a will, their assets are passed down according to the Rules of Intestacy set by the courts. This could mean that some of your loved ones are left without.
When should I update my will?
If you've already got a will you should be reviewing it every five years to reflect your life changes as well as after any major events such as: • Getting married (this then overrides any previous will) • Getting separated or divorced • Having a child • The death of the will's executor (a new one will be needed) • Buying property • Buying large assets like a car
What if I co-own my property with someone?
While a legal spouse will automatically inherit the whole property, if you're buying a house jointly with someone else, perhaps a friend or partner, there are two ways to go about it.
The first route, where you are known as ‘joint tenants', is the one we see most often and means that you each own an equal share of the property. If one of you were to die, the property would automatically be passed onto the other person who then becomes sole owner.
Tenants in Common:
The other option is to become ‘tenants in common' which means each of you owns a share of the property, this can be equal or not depending on what the two of you decide. When you write a will you can specify who you want this share to go to or you can divide your share between more than one person. This gives you more flexibility on who inherits your assets.
What happens if neither of you have prepared a will?
But what happens if you and your joint tenant both die? If neither of you have a will, the house will be passed onto the courts to decide who inherits according to the rules of intestacy. You won't get to decide who benefits from your estate, which can be worrying, particularly for any surviving family. The only way to have complete control over what happens to your property after you die is to make a will.
How will Inheritance Tax affect any property left in my will?
We often get a lot of questions surrounding Inheritance Tax in conveyancing, but this is also something that can affect your property after you die. Depending on the value of your estate, your benefactors (the people who benefit from your will) might need to pay Inheritance Tax, especially where property is involved, as this will raise the value of your estate considerably. Inheritance Tax must be paid within 6 months of a death and is only due on estates worth over £325,000. This is after any mortgage has been paid and any tax deductible gifts to spouses, charities or other institutions have been taken out. Luckily if property is involved, your benefactors can extend the period in which Inheritance Tax is due by up to 10 years, or until they sell the property and have the funds to pay the tax. All of this can be confusing for your benefactors at an already upsetting time so we recommend speaking with a professional as soon as possible to ensure that your inheritance is safe and your family will get what they are entitled to without any legal problems. For expert help with writing your will, we recommend you contact Best Value Wills. The company has helped many of our conveyancing clients to secure the future of their properties and is friendly, professional and affordable.