- March 2017
Will you? They won't
People in second marriages or relationships, with children from either side, should consider what will happen on their deaths very carefully indeed.
Some assets owned with someone else will pass to them directly upon your death, even if you have a Will.
If you die without a Will, your spouse receives the first £250,000 - there may be nothing left for anyone else. A cohabitee receives nothing.
If everything is left to your partner/spouse, they can change their Will disinheriting your nearest and dearest. A mutual Will, where each of you has a Will specifying the division of your combined estates, prevents this after your death. The survivor can defeat a mutual Will by gifting money or property in their lifetime, which the displaced beneficiaries can challenge.
Will Trusts, taking effect after death, offer another option. Most frequently used are:
Life Interest Trusts giving someone the right to money or property for their life, but stating where it must go after their death. The Trust Capital, whether £50,000 or a house, is safeguarded: they receive the “income”: interest, dividends or the right to occupy a house, which is a popular choice as your spouse/partner is housed but your children inherit your share after his/her death.
Discretionary Trusts (DT). These are more complex. You nominate the beneficiaries, but when or how they will benefit is left to your Trustees’ discretion. Potential beneficiaries are not limited to your spouse/partner and children. The DT provides maximum flexibility after your death to meet changing circumstances. If your spouse/partner needs Capital, or your children need money, your Trustees can give it to them.
There are serious tax consequences to all of the above dependent on the individual’s circumstances, including marital status. Take professional advice (from a solicitor) before acting.
For further information, please contact Carol Lockett on 01394 279636 or by email to firstname.lastname@example.org.
This article provides only a general summary and is not intended to be comprehensive. Special legal advice should be taken in any individual situation.back to articles...