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Asset Protection Wills
We do Wills and Legacy Planning Exceptionally Well!
When making a Will it is important to think about what you would like that Will to do when it is intended to do so. Making a straight-forward Will (or as they are often known: Simple Wills) is ok although they do have an inherent drawback.
That’s to say, when passing all assets to your spouse or partner directly in a Simple Will, those assets are from that point on entirely owned by the surviving partner
Why should I get expert advice?
Robert was married to his second wife Mandy and they had 2 children together. When he unexpectedly died, his ‘Simple Mirror Will’ passed all assets to Robert’s second wife Mandy.
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Mandy subsequently invited Ashley to live with her after a short courtship of seven months. She met Ashley through on-line dating agency and he has a daughter.
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Mandy has recently told a close friend that she and Ashley intend to marry. When they marry, Ashely (and his daughter) will have prior legal entitlement in preference to both Robert and Mandy’s children kids under the Matrimonial Causes Act 1973 and, even if they do not go through with the marriage, under the Provision For Families and Dependants Act 1975.
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This means that Robert and Mandy’s children stand to lose any inheritance that Robert and Mandy assumed they would receive.
Names changed to protect the people mentioned
A Real-Life Case
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How Your Legacy Solutions
Can Help
Property Trusts (Drafted into both Wills)
A Property Trust can be an effective way of protecting a house from loss to future marriages (if the survivor re-marries) and at the same time providing ‘legal rights of residence’ for the remainder of the surviving spouses for their lifetime (or for a set period).
The trust arrangement ends following the death of the surviving spouse and any trust assets then pass to the beneficiaries according to the terms of the Will. It ensures that children do no miss out regardless of second marriages and families.
Where there are assets such as investments, savings and/or investment properties (excluding pensions and life insurance policies), a Life Interest Trust should be considered as well as a Property Trust for the main residence.
This means that all assets in the name of the deceased are protected (although capital and income is available to the survivor). It also ensures that children do no miss out regardless of second families.
Trusts drafted into Wills can also be a very effective way of protecting assets for children when the second spouse or partner dies. We refer to these are Beneficiary Protection Trusts (BPTs).
Life Interest Trust (Drafted into both Wills)
Beneficiary Protection Trusts (Drafted into both Wills)
These trusts are drafted into both Wills so that any residue (remainder of the assets following the death of both parties) can pass into trust for specific beneficiaries (normally children) and/or grandchildren.
Each child or grandchild would have their own Beneficiary Protection Trust which could be managed by the beneficiary (providing they are over 18) and at least one other person (a family member or close friend).
The main advantage is that assets can be available for their future life and enjoyment with the added benefit that such assets are not available to anyone who might have ill intentions such as a former spouse or partner or un-reliable friend or carer. The trust also prevents the payment of further inheritance tax by the next generation.
How we helped Karen & Mark
Karen and Mark trust their two daughters both of whom are married. They very much like and trust one of the sons-in-law (son-in-law A) although have a deep mistrust of the other (son-in-law B).
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On one occasion son-in-law B told Karen and Mark he was making large amounts of money through the use of on-line gambling and that he was ‘thousands of pounds up’.
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In a separate conversation with their daughter, Karen and Mark were told that in fact the ‘thousands of pounds up’ was ‘counter-balanced’ by the even more thousands son-in-law B had borrowed against his business to fund his gambling habit. The daughter and son-in-law B have since separated.
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Karen and Mark have since made new Wills with Protective Trusts which include Protective Property Trusts, Life Interest Trusts and Beneficiary Protection Trusts so that all assets can settle into trust after the second of them has died.
These trusts will protect all assets and ensure that they are available to Karen and Mark’s daughters. This has provided significant peace of mind for all concerned.
