THE BENEFIT OF WILL TRUSTS
Most people make a will and think ‘Great, I have finally done it’ but usually these are just basic wills that give your estate absolutely to your beneficiaries, either spouse or children. If you own a property that you have worked hard all your life to own and have some savings you usually want to pass your house to your children and spend your savings having a nice retirement. Unfortunately there are lots of things that can happen in your lives or your children’s lives that could get in the way of your children inheriting your estate. Trusts written into your wills can help protect your assets and make sure they pass to whom you want rather than being lost due to unforeseen circumstances.
If you are married or are partners and have basic mirrored wills giving your estate to each other absolutely and then to your children there is no protection for your assets. After the death of the first spouse the survivor owns the whole estate in their sole name so if there are any claims made against the survivor’s estate the whole estate is at risk. If the survivor has financial problems, remarries or co-habits, claims can be made against the whole estate. If the survivor remarries their original will is cancelled as marriage revokes wills. If the survivor doesn’t make a new will to protect their children, the new spouse could inherit the whole estate and your children could receive nothing as the estate would follow the new spouse’s bloodline. This is called sideways disinheritance and is becoming more and more frequent.
If you are married or are partners you can have trusts written into your wills that upon the death of the first spouse or partner, their half of the property or estate is held in trust for your children giving the survivor a life interest or a right to reside which protects the first half of the property or estate during the life of the survivor. The survivor is protected and always has a right to reside in the property, can move house or downsize, and even have access to any equity from the first half of the property. It is flexible enough for the survivor to carry on living as they wish without restricting them, whilst protecting the first half of the property. It can be protected against any third party claims, and for example, sideways disinheritance if the survivor remarries.
If you have children from previous relationships you can hold your halves of the property in trust to your respective children giving each other a right to reside making sure that your children receive your half of the property after you have both passed away and that the survivor always has somewhere to live.
If you are concerned that when any children receive their inheritance it could be lost either through them getting divorced, having creditors, or being vulnerable or irresponsible, you can pass their inheritance into a trust to guard against this from happening. Their inheritance would be protected while it is in the trust and trustees would be appointed to manage it and make responsible decisions rather than large amounts of money being lost through unforeseen circumstances or irresponsible decisions made by your children.
Will trusts and planning can also help reduce inheritance tax.
DON’T LEAVE IT TO CHANCE AND HOPE THAT YOUR ESTATE PASSES TO WHOM YOU WANT!
CREATE A TRUST IN YOUR WILL AND PROTECT YOUR HARD EARNED ASSETS AND FAMILY