Asks Richard Foster of the NLS

A story published in national press on 4th May 2006 suggests that recent changes announced in the budget will affect far more people than was previously predicted.

According to the article, approximately ten million people, ten times the initial estimate, will have to review and possibly amend their current wills at a potential cost of around £2.5billion.

There are roughly 15 million wills in existence in the country today and figures released by the Law Society show that up to two thirds of these could be affected.

The article intimates that people with Trusts in their Wills (specifically the Accumulation and Maintenance [also known as a Children’s Trust] and Interest In Possession Trusts), those whose estates are worth more than the Nil Rate Band (NRB), which is currently £285,000, and those with children under the age of 25 should have their Wills reviewed, at an average cost of £250.

What the article perhaps doesn’t make completely clear is that the changes really only affect those with assets over the NRB. It may not be an issue which trusts are in a Will or the age of the person’s children if their estates are worth less than the NRB.

The charges that the article alludes to are only applicable to amounts held in trust above the NRB threshold. A person may have two Accumulation and Maintenance trusts in his/her will, have two children under 25, and an estate of £200,000. Such a Will should not be affected as the whole estate is below the NRB threshold.

However, should the estate increase to above the NRB then the new charges will apply, but only to the amount of the estate held in trust that is over the NRB. Therefore, people whose estate is currently over the NRB, or who feel their estate could grow considerably in the near future, should have their current Wills reviewed.

The article also fails to clarify that the changes do not in any way revoke Wills or make them unlikely to work. The vast majority of Wills in existence will still be applicable, and do not need replacing. However, it may be worth reviewing your Will to see what the changes could mean to you and your Will.

If the new provisions are likely to affect you and your Will, feel free to contact your local National Legal Services consultant, who will be able to help. You can freephone 0800 3282364, quoting the reference  8953 or visit their website