Writing a Will is still a good way for families to cut their inheritance tax bill, despite recent scaremongering after a court ruling earlier this year.

When Dr Patrick Phizackerley's wife, Mary, died in April 2000, Dr Phizackerley thought their Will had been drawn up to ensure there would be no inheritance tax (IHT) to pay on the family home, but the court disagreed.

The point of contention in the Phizackerley case was the use of a discretionary Will Trust. Their Wills specified that when the first partner died, only part of the value of their property would be left to the surviving spouse and the rest would go to a discretionary Will Trust. As long as the amount in the Trust did not exceed a certain value, the Phizackerleys thought this would eliminate any IHT liability - and thousands of other people have made similar arrangements.

When the taxman challenged the Will, though, Dr Phizackerley found that his arrangement, combined with personal circumstances, clashed with an existing anti-tax avoidance law. This meant Dr Phizackerley had to pay tax on the whole property value when his wife died.

"The facts of the Phizackerley case were very specific and the success of the Revenue's argument was down to a very particular set of circumstances which existed in the history of the Phizackerley family," says Dawn Oliver, partner at law firm Harrison Clarke.

Oliver claims some media articles wrongly implied that all such tax arrangements would no longer work and it would no longer be possible to minimise IHT using Wills. "This misrepresenting of the findings of the case has unduly worried a lot of our clients," she says.

If your Will is drafted correctly you can avoid potential problems like the ones Dr Phizackerley faced. IHT advisers St James' Partnership says it is not surprised by the ruling and, like other specialist advisers, has developed legal strategies to get around potential problems. Clearly, seeking specialist advice is vital.

Inheritance tax affects more people in the UK than ever before. With property prices ever-rising, a growing number of tax payers own an estate whose value far exceeds the current IHT threshold of £300,000. And it is not just the family home that counts as your estate.

"Many people don't realise how much their estate can amount to once everything is taken into account - house, car, possessions, business interests, savings, shares, jewellery and so on," says Alan Stone from financial adviser Edward Jones. " It's very easy for an estate to be worth a lot more than the current £300,000 inheritance tax threshold, with tax charged at 40% on everything above this limit."

He gives the example of an estate worth £500,000. The estate would leave a tax liability on the balance of £200,000, meaning £80,000 would have to be paid before the estate was released to beneficiaries.

Stone reiterates that writing a Will is vital. If someone dies without a Will it can lead to legal complications over exactly who inherits what. It can even result in the State taking a significant share on top of any IHT due.

"It's wrong to assume on death everything passes to one's nearest and dearest," says Stone. " This is often simply not the case. But interests can easily be safeguarded by making a Will and taking advice."

Another way of minimising your IHT bill is to make gifts to loved ones. Currently, you can give gifts of up to £3,000 once a year to any person of your choice without incurring IHT. Any unused balance from the previous tax year can be carried forward to the current tax year, but no further.

You can also make tax-free gifts of up to £250 to any number of people each year. And for weddings, parents can gift £5,000 to each of their children and grandparents £2,500 to each grandchild.

For your free guide to inheritance tax (sponsored by St James Place), including advice on who it may affect and how, and ways in which to reduce your liability, call 0870 834 7572.