Who May Benefit From A Will? – Example2
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Making a Will is not about wealth it is about making sure that what you want to happen to your estate does happen. It gives you the opportunity to specify such things as who will administer your estate, who will care for your children and who will receive specific items of your property.
Mike and Jean meet and marry in their fifties. They are both widowed with children and grandchildren when they meet.They agree that their respective children should benefit from what they each brought into the marriage.
Their wills are written so that on Mike’s death Jean obtains an income from a trust into which all his assets are placed. Mike’s will states that when Jean dies his children are to receive his assets between them subject to a legacy of £5000 to each of his grandchildren then living. Jean’s will is written under a similar arrangement.
There are various other elements which can be added to this arrangement where inheritance tax is a consideration. For instance, the trust may be confined to the nil rate band for inheritance tax or the widow’s interest may be terminated if she remarries.
This type of life interest arrangement requires professional drafting at all times as the trust must be carefully worded.
It does, however, offer protection to both the surviving spouse and the children from both marriages and is well worth considering. Professional trustees are strongly recommended in such situations since having the widow or children as trustees may lead to allegations of bias or self-interest in making financial decisions. At best having beneficiaries as trustees is likely to create a conflict of interests that they may find it uncomfortable to deal with.