Planning your estate

When a person gets married or enters into a civil partnership any existing will is automatically revoked -- unless it is a will that he or she made specifically in anticipation of the marriage or civil partnership. (NB. This may be particularly significant for someone who is planning a second marriage and who has an existing will benefitting children from his or her first marriage.)

A will enables you to distribute your assets according to your wishes when you die. It's also a means of providing for family members. If you have minor children, you can use a will to appoint a guardian to look after them. You can also use a will to provide legacies or specific gifts to non-family members, such as charity, friends and employees. If you die without a will, the intestacy rules will determine who gets what -- you will have no say whatsoever.

A grant of probate is a court order that gives a deceased person's executors authority to deal with the deceased person's assets. Ordinarily, the persons named as executors apply to the court for a grant of probate as soon as possible after the date of death. If there is no will, the court can give an equivalent order known as "letters of administration," which gives the "administrator" authority to deal with the deceased's assets.

The intestacy rules determine who gets what if a person dies without a will. They provide, for example, that the spouse or civil partner of the deceased gets the first £250,000 of the deceased's assets, plus the deceased's personal belongings and a "life interest" in half the remainder of the assets; the deceased's children get half of the excess assets after the first £250,000, and the remainder on the spouse's death. If the deceased is married without children or is unmarried, then there are further rules that apply.

People create trusts because they offer more flexibility and control over the transfer of assets than outright gifts. In a trust, you can separate capital and income, and distribute the two separately. In addition, you can parse out assets over a period of time or create a "life interest", (so that one beneficiary gets to enjoy the asset during his/her lifetime, after which it passes to a second beneficiary). In a trust, you can also control the disposition of assets for many years -- even beyond the grave.