An excerpt from Lawpack’s Last Will & Testament Kit.

When you’re making a Will you need to think about the property that you own. And how you own it. This is because, under current law, not all property can be passed on under a Will.

You need to find out whether any property you jointly own (this can be your home, a bank account or any other property) is held under a joint tenancy (which means that you both own the whole property) or under a tenancy in common (which means that you each own a specified share in the property and those shares are not equal, say 40% and 60%)?

Any property that is owned by you with another person as joint tenants doesn’t fall into your estate and therefore cannot be dealt with by the terms of your Will.

The distinction between a joint tenancy and a tenancy in common isn’t easy where property is owned equally so if you’re uncertain how your property is held, you should take legal advice.

If the property is held under a joint tenancy, then upon your death your interest in the property automatically goes to your surviving co-owner.

If your property is owned under a tenancy in common, then you can give your share in the property to whomever you wish when making your Will.

If you wish to do so, you can (unless you’re domiciled in Northern Ireland) easily change a joint tenancy into a tenancy in common by presenting your co-owner with written notice of your intention.

It’s important, however, that this written notice is given before your death, and not in your Will. If you wish to do this, you need to take legal advice. This enabling legislation hasn’t been passed in Northern Ireland, so you must take legal advice.

A surviving joint tenant may be liable to pay Inheritance Tax on inheriting your share of the jointly owned property, unless you specify otherwise when making your Will. This doesn’t apply to spouses or civil partners who are automatically exempt from Inheritance Tax in these circumstances.

If you don’t wish the other joint tenant to pay this Inheritance Tax personally, you must include the following statement in your DIY Will:

‘I wish the burden of any tax due on my interest in property held under a joint tenancy to fall on my residuary estate.’

Property which is situated abroad (which for this purpose includes any other jurisdiction in the UK other than where you are domiciled) may not pass under your Will.

You should take legal advice before making a Will if you own or have an interest in property abroad.

Generally, life insurance policies that are expressed to be for the benefit of your spouse and/or children don’t pass under your Will and therefore don’t form part of your estate.

The premiums paid on such a policy are not taxable if paid out of normal disposable income. The policy can be written in such a way that the proceeds are not taxable when you die.

A life insurance policy is therefore a good way to provide your family with the funds to meet any tax payable upon your death. Consult your life insurance company for more details.

Your pension rights may pass outside your will in the same way. Your employer or pension provider should have more details.

In many cases, you will be able to name the person who is to benefit from your pension rights, but only in a separate document, and not in your Will.

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