Are Legacies Straightforward?

Wills & Probate expert Sara Hilliard discusses the different types of legacies you can leave in your Will and some helpful tips when dealing with somebody’s legacy…

What Are The Different Types Of Legacies?

When writing a Will, consideration must to the following…

• Specific Gifts i.e. I give my car to…
• General Legacies i.e. I give £1,000 to…
• Residuary Estate i.e. I leave the rest of my estate to…

Legacies are often relatively small gifts in comparison to residue and generally, there should be no problems arising.

However, if an estate has depleted by the time of a person’s death due to home fees or general cost of living, a legacy could turn the estate on its head. This is because legacies are paid out first so the main beneficiaries, i.e. the residuary beneficiaries could end up with less than the legatees or nothing at all.

What To Consider When Dealing With Legacies…

Thought should also be given as to whether the legacy is to;

• Vest, if the beneficiary is under the age of 18
• Carry income
• Be indexed link to keep up with inflation
• Be paid out on the first death of a couple making mirror Wills or the second
• If the legatee is a direct descendant, is it to be paid down the lineal line, if the legatee has not survived
• Is there is a life policy that pays out only on death and would cover the funeral costs and potentially, any legacies?

It is important to note that if a legacy has not been paid out within 12 months of a death, interest becomes due and is paid gross (that is, no income tax is deducted) unless the legatee is resident outside the UK, where it is necessary to deduct basic rate tax first.

The current rate from the 23rd August 2023 is 5%.

All past and future rates can be found here.