WHY MAKE A WILL?
It is unpleasant to contemplate the idea of death. However, a Will prepared by a solicitor is vital way to protect and secure the future security of your loved ones.
Planning your estate to ensure that your loved ones are financially supported, but also to make decisions such as choice of guardians for your children, will ease the burden on those that you leave behind.
It is worth bearing in mind that unmarried couples have no rights under the intestacy rules (the rules that apply where there is no will), so if one cohabitee dies the other will not inherit unless provision was made in a will.
Also, a widow or widower may not necessarily inherit the whole of the estate. Other relatives may be entitled to a share of the estate, and this may result in hardship.
Excellent reasons for making a will include:
- You decide who will benefit from your estate
- You ensure that any inheritance tax liability arising from your death is kept to a minimum
- You appoint guardians for your children
- You decide at what age your children should inherit
- You decide who to appoint as your executors who will administer your estate and ensure that your wishes are carried out
- You can leave particular items of your estate to specific people
Mirror Wills of Life Interest Trust Wills
For couples, straightforward Mirror Wills are often best, particularly for those couples that have very similar wishes about what should be written in their wills.
Protecting the succession interests of the family is increasingly important in the context of:
- Second marriages
- Future care home fees
A Life Interest Trust Will is a Will that includes a Life Interest Trust in favour of a surviving spouse. It allows for the assets within the Trust to be either invested or retained for the benefit of the surviving spouse. Any income generated by such investments is paid to the surviving spouse. The spouse has an absolute right to the income only or to the immediate use and enjoyment of trust property.
The benefits of a Life Interest Trust Will include:
- Ensuring that whilst the surviving spouse is looked after for the rest of their life, the capital value of the fund is ultimately preserved for the beneficiaries, such as your children. This protects the estate within the Trust from the influences of another spouse, for example were the survivor to remarry
- As the spouse has no right to the capital of the fund the capital value of the fund could not be taken into account by a Trustee in Bankruptcy
- Based on current legislation, a Life Interest Trust effectively ‘ring fences’ the assets and prevents them from being taken into account were the survivor to require either residential or nursing care
- The life interest gift to your spouse qualifies as if it were an absolute gift thus enabling the nil rate band to be transferred for Inheritance Tax purposes
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