Protect Your Home

Your home is probably your most valuable asset, which is why you need to make sure that it’s secure when you pass away.

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By leaving your home in a will or trust, you can have peace of mind in knowing exactly what will happen to it when you’re no longer here, and that all of your wishes are fulfilled.

It is not uncommon for property to be cause for dispute when somebody passes away, but by inserting a property trust into your last will and testament, you will be able to decide yourself what happens to your home. Not only will this ensure that your requests are granted, placing a property trust within your will relieves your loved ones of the hassle that comes with legal action at an already distressing time.

Unite Wills can help you to spell out exactly what happens to your property when you pass away, including deciding who will be in charge with distributing your assets.

If you die without a will (known as dying intestate), it will be down to the law to decide who gains control of your home. In most cases, the outcome will be as you will have hoped, however, there are many cases in which it could end up in the wrong hands – it could even be left to the government. 

Some of the consequences of not having a will include:

If you’re serious about ensuring that your home is passed onto the right people, the best way to do so is to include a property trust fund in your will.

Property trust fund – What is a property trust fund?

By placing your home into a property trust fund, you are giving permission for somebody else (a solicitor, friend or family member) to manage your property in accordance with the wishes that you leave behind. 

As well as securing your property for chosen beneficiaries, placing your home in trust reduces the rate of inheritance tax owed by your loved ones, meaning the value of your home remains closer to its current market rate. 

When you place your property in a trust fund, your loved ones will retain the right to occupy your home, as well as earn income from rent. As well as this, properties that are left in trust cannot be used to fund potential care home fees which could take away from the value of the property. 

Inheritance tax

When you pass away, there is a sum of money that is owed to the government, typically paid between the time of death and when your beneficiaries gain control of your assets – this is known as inheritance tax, and it can reduce the value of your home significantly.

The amount of inheritance tax owed on your property will be determined by the Nil Rate Band (NRB), which is the threshold for paying inheritance tax – in the UK, your estate must be worth more than £325,000 if your loved ones are to be charged inheritance tax.

The standard rate of inheritance tax is 40% and, like with most other forms of tax, you are only charged tax on the value of your estate above the threshold. For example, if your estate is worth £400,000, you’ll only pay tax on the £75,000 which falls above the threshold.

40% is not an insignificant amount, and for large, valuable estates, could see hundreds-of-thousands of pounds lost in tax – luckily, there are a few ways to reduce this impact. 

How to avoid inheritance tax

The most common way of avoiding inheritance tax on a property is by leaving it to a spouse (husband, wife or civil partner) – when you do this, you won’t be charged a penny in inheritance tax on your property.

If you don’t have any loved ones that you want to pass your estate onto, you may decide to leave it to a charity of your choice instead. This is another way of avoiding inheritance tax as charities are considered ‘exempt beneficiaries’.

If leaving your property to anybody else, you will more than likely have to pay inheritance tax – however, this threshold can be increased from £325,000 to £450,000 if it is left to children or grandchildren.

If you aren’t married to your partner then this would be a viable option to reduce the impact of inheritance tax, but each individual circumstance is different. Here at Unite Wills, we believe that your hard-earned assets should reach their final destination with as little interference as possible.

For expert advice on your individual needs, get in touch with one of our expert advisors who will be happy to talk you through your options.  

 

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