Since the government announced new changes to Inheritance Tax between spouses, it is now no longer necessary to draw up long complicated wills with discretionary trusts, wills can be much simpler providing everything else is relatively straightforward.

Married couples will now have a joint nil-rate band instead of two individual nil-rate bands. The Nil-rate band is currently £325,000 for an individual or £750,000 for a married couple utilising the "transferable nil-rate band". If an estate's assets total over these amount amounts, Inheritance Tax is payable on anything above the nil-rate bands at a rate of 40%.

The rules mean that for any surviving spouse who dies after 9th October 2007 will be entitled to use up whatever proportion of the nil rate band which was not used by their husband or wife who died before them.

If you are married your estate does not automatically pass to your surviving spouse. If you do not have a will the law states that your spouse will receive the statutory legacy. If the deceased had children the statutory legacy is £250,000. Anything over this amount will be divided between the deceased's children, grandchildren or great grandchildren and their spouse.

If there are no children, grandchildren or great-grandchildren, the statutory legacy is £450,000. Anything over this amount will be divided between the deceased's parents, siblings, nieces or nephews and their spouse.

In some circumstances this can mean that the family home would have to be sold in order to distribute the estate. This could be avoided by making a will. You can leave your estate to whomever you choose in a will and therefore the Government imposed statutory legacy does not apply.

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