Stephen Gold: Death bed gifts, making codicils, the impact of marriage and divorce, and protecting property
Stephen Gold is a retired judge and author who recently wrote a popular series for this is Money on how to be a successful executor.
In a new two-part guide, he first explained the wisdom of having a will and today looks at how to avoid common blunders when deciding your last wishes.
Hopefully, I have persuaded you of the myriad benefits of making a will, but there still are many errors you might fall into when trying to do the right thing.
Here are my tips on what to do before making a will, after you have done so, and if you have left it very late.
Do it yourself?
I wouldn’t recommend it. If you insist on DIY in the most straightforward of cases, then go and buy a will from a stationer and fill it in.
But even then, there are technical rules which must be observed and any ambiguity in the words you use could lead to tears.
Two witnesses are required and not someone to whom you have made a gift or that will be lost.
Some non-lawyer firms carry on the business of will writing for a fee which they can legitimately do. I would steer clear of them.
The Competition and Markets Authority has been investigating potential consumer law breaches by will writers and will be reporting in due course. My strong recommendation is to use a solicitor to draw up your will.
Next month, free wills month is back (go to freewillsmonth.org.uk). That’s a scheme spearheaded by well-respected charities who hope that in return for a free solicitor produced will, you will gift something to one of them.
No obligation, of course. You have to be aged at least 55 to qualify.
They beat the will aid scheme (go to willaid.org.uk) by one month. This runs in November 2023.
Here, participating solicitors will again provide you – this time anyone over 18 can take advantage – with a free will and pray you will stump up a gift to charity as a thank you.
They suggest £1,000 for a single will or £180 for two basic mirror wills (see ‘The wills duet’ below).
If you can bear to read my book, you will find The Longest Will in The World (please forgive the poetic license) which should give you some ideas about you would like your will to go.
Without it, you may never have thought about giving the proceeds of your Premium Bonds to your next-door neighbour in recognition of all the assistance he has given to you over the years in the cutting of your hedge and lawns and the emptying of your cesspit.
The wills duet
If each spouse or partner agrees to make mirror wills – ‘I give to you and you give to me’ etc – could one of them do the dirty on the other and secretly make a second will which provides for something completely different?
The general rule is that while they are both alive, either or both can lawfully change the first will. But the position would be different after one of them died.
The beneficiaries under the first will ought to be able to obtain a court order ripping up the second will if they can prove that there had been a no-change commitment by which both spouses or partners had intended to be bound.
That commitment could be incorporated in the original wills.
‘This will is made pursuant to an agreement between myself and my wife Freda Factor under which she is making a will which, where appropriate, is in substantially the same terms as this will and it is a term of the agreement that neither of us will revoke our respective wills without the written consent of the other.’
Home ownership: Make sure this is set up in the way you wish before you or your partner die
Jointly owned property
Where your home or other property is in the names of both yourself and your spouse or civil partner, you will be taken as owning as joint tenants or tenants in common.
Sorry about the lingo but I didn’t invent it. If you are joint tenants and one of you dies during ownership, their interest automatically passes to the survivor.
That would eliminate the possibility of leaving your interest to a third party such as children. An attempt to do so in your will would be ineffective. You can remedy that situation by changing over to tenants in common. A bit of paperwork but relatively painless.
How do you do it? You need a notice of severance which must be given to your co-owner and, where the property is registered at the Land Registry, you should apply to them for registration of what is called a Form A restriction. No fee.
To Minnie Mouse, Cheese Cottage, High Street, Titchfield, Hants PO14 4AE
I CHARLES MOUSE hereby give you notice of my desire to sever the joint tenancy in equity of and in Cheese Cottage, High Street, Titchfield, Hants PO14 4AE now held by us as joint tenants at law and in equity.
Dated 01 September 2023
(signed) Charles Mouse
The court would have the power where there are proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 (see ‘Outwitting the disregarded’ in part one) to claw back into the estate the interest of the deceased in property which was held as joint tenants and so automatically passed to the other owner.
Retired judge and writer Stephen Gold
Stephen Gold is author of ‘The Return of Breaking Law’, a guide to your legal rights and winning in court or losing well.
It is published by Bath Publishing and, among a myriad of topics, includes a template for the longest will in the world and tips for removing executors and claiming against an estate when you have been left nothing.
That could then make capital available to satisfy the claim being made.
You have made your beautifully crafted will and suddenly remembered you have forgotten the gift to me of your false teeth.
Or perhaps you specifically gifted your Skoda and have just bought a Roller. No need to tear up that work of art and start all over again.
You can add what is known as a codicil to your will which can be typed or written on the original or on a separate sheet secured to the original.
The same witnessing and other rules which applied to the original will equally apply to the codicil.
Look, no will
We don’t have a compulsory system for will registration.
If, after your death, your will cannot be found and there is no acceptable evidence about what it had contained, the intestacy laws will be activated.
Or if a dissatisfied relative rips up your will – that’s a crime so do not try it at home – the same thing could happen, or an earlier will might be acted on.
The safest bet is to register the will (and you can add to it any codicil you have made) with the Probate Service and they will store it for a one-off fee of £20.
You can withdraw it subsequently for no charge. Probate can never be granted for an earlier will and letters of administration can never be granted on the basis that you died without a will.
There are alternatives. The National Will Register, which is a commercial concern, registers the fact that you have made a will and where it is located.
Over ten million people have registered. It does not keep the will for you.
Useful for establishing whether a will exits when one cannot be found and also whether the forged will being flourished by your long-lost cousin 20 times removed which leaves your entire estate to him is the Real McCoy.
Registering a will costs £30. Searching for whether a will exists costs £58.80. And asking for a search to be carried out with law firms and will writers for a possible will which has not been registered will cost £126. These fees are VAT inclusive.
Where your solicitor has drafted the will, you can ask them to store it. Almost certainly, they will not charge for doing so – and hope they do not go out of business or have their safe blow open.
As a last resort, you could ask your bank to store the will if they have a branch within 100 miles of your home.
Most of the banks used to oblige for a fee, of course, but no more although they may still be prepared to hold on to any will you deposited with them before they stopped obliging (though do check if they are now charging and how much).
Barclays stopped in 2014 and Lloyds packed it in for new customers in 2011. And I can now put you and Nigel Farage out of misery with the information you were bursting to discover.
Coutts will store your will if you are a customer provided you used them to draw it up. So long as you appointed them as executor, they will make no charge for storage.
If you did not appoint them as executor, they will make an annual charge. They refuse to tell me how much.
I am afraid I have no spare capacity under my bed so please do not ask.
Marriage: How does it affect an existing will and what if you get divorced?
‘I’m getting married in the morning’
Oh dear. Generally, marriage or civil partnership automatically revokes a will. But it will remain effective if it is clear that it was made in contemplation of that particular marriage or partnership.
‘This will shall not be revoked by my intended marriage to Freda Factor.’
A divorce or annulment of a marriage or dissolution or annulment of a civil partnership will automatically cancel out a will gift to the former spouse or partner or their appointment as executor unless it is clear from the words used in the will that the gift or appointment is to be unaffected.
The ultimate way to swindle the Taxman
Give the lot away during your lifetime and to hell with a will. Where it is to your UK domiciled spouse or civil partner, capital gains and inheritance taxes are likely to be avoided although they might turf you out of the family home.
A genuine gift to someone else during your lifetime will be disregarded for inheritance tax if you survive for seven years.
There are partial disregards after three years. The longer you survive, the greater the value of the gift that is ignored on death.
More modest gifts can be made each tax year, including on the occasion of a marriage or civil partnership, and be totally disregarded from the value of your estate for inheritance tax purposes, even though you pass away within seven years or less, so long as the prescribed limits are not exceeded.
Got a tax question?
Heather Rogers, founder and owner of Aston Accountancy, is This is Money’s tax columnist.
She can answer your questions on any tax topic – tax codes, inheritance tax, income tax, capital gains tax, and much more.
You can write to Heather at email@example.com.
For example, gifting in each tax year of up to £3,000 to one or more individuals or of up to £250 to each of as many people as you can find to take the money (so long as they are different from the £3,000 recipients) will be okay and win you plenty of friends in the bargain.
Gifts on birthdays and at Christmas are also exempt from inheritance tax when made out of your regular income and there are exemptions too for gifts to certain charities and political parties.
An accountant’s advice is sensible before you ask Coutts to make the transfer.
‘I’ll do it my way’
If your way is a late verbal announcement with no will, that’s dodgy. The law on so-called death bed gifts – gifts made in contemplation of death – is strict.
To be effective, you must have had good reason to anticipate death in the near future from an identified cause.
It must have been intended to take effect if and when death occurred so that you could cancel it at any time. And you must have given over physical possession of the gift – title deeds to a property would do – or some means of accessing it.
In a 2015 case, the Court of Appeal heard that four to six months before her death, an elderly cat and dog loving aunt had handed her nephew the title deeds to her home, saying ‘This is yours when I go’.
But her legally effective will had given everything, including the home, to seven animal charities. It was ruled that the gift to the nephew did not count because it had not been made in contemplation of death.
The aunt had not been suffering from any terminal illness but simply approaching the end of her life span.
‘Well, I never!’
If you could not tell the difference between inheritance tax and margarine and your will would lead to a tax bill which could have been avoided if drawn up more efficiently, do you have to be recalled from the dead to put things right?
No. The Inheritance Tax Act 1984 enables a will to be rewritten – just once – with the agreement of all beneficiaries concerned so that it escapes all or some of the inheritance tax which would have been payable under the will as drawn.
Even new beneficiaries can be added. The same law can be used with the same result where there was no will and intestacy applies.
Certain procedural steps must be observed, and action needs to be taken within two years of death. Independent professional advice to beneficiaries wanting to take advantage of this law is highly desirable.
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