Wills and Trusts
When it comes to making a Will, we understand that sometimes the process can seem daunting and you may want to talk through your options face to face with a professional, before making any decisions. With our home visit Will Writing service, we can visit you at home to discuss your circumstances, answer your questions and provide you with all the information you need.
At the heart of our home visit service is the belief that we need to truly get to know you and understand your wishes. Your Estate Planning Consultant will take the time to discuss your requirements in detail, then explain how the use of Wills, Trusts and Lasting Powers of Attorney can work to protect you, your Estate and your loved ones
Once we’re happy that we fully understand your needs, we will work closely with you to safeguard your family’s financial security. We will talk you through your options and make recommendations based on your individual circumstances, helping you to protect your wealth for the people you love most.
Everyone needs a will, make yours today
The answer is everyone. In particular, anyone with dependent relatives, (children under the age of 18, elderly relatives or relatives with a disability who have special needs), anyone who owns property or has any type of asset which you would wish relatives, friends or charities to benefit from
The vast majority of people put off making a Will for a variety of reasons, either believing that the people they would wish to inherit will automatically do so, or because they don’t think it is relevant to them at this particular time.
The reality is that you can put off making a Will until it is too late and this poses all sorts of problems for the people left behind and could mean that some or all of your inheritance either goes to the wrong person or to the state
- Specify whom you wish to inherit your estate, in what order and in what proportions so that you have comfort in the knowledge that your wishes will be carried out.
- Make specific legacies to family or friends or gifts to your favourite charities.
- Appoint suitable guardians for young children rather than leaving the decision to the Courts.
- Set up maintenance trusts for children to protect their inheritance until an age specified by you.
- Ensure the inheritance of your children or other beneficiaries should the survivor re-marry.
- Protect your share of the property from having to be sold to pay for the survivors future care fees, thus still having assets to leave to your family.
- Avoid paying 40% Inheritance Tax on your estate, so giving more to your chosen beneficiaries rather than the Government.
This is a common misconception and dependant on the size of your estate, there are set rules which will be applied to determine who inherits and how much if you do not make a Will
If you don’t have a Will then the Local Authority decides where orphaned children are best placed. Is this scenario really what you would want to happen to your children?
You can avoid your Local Authority deciding who will look after your children and where they will live by having a Will.
If you have young children making a Will allows you to choose who you would like to look after your children if you die. If you currently have parental responsibility over your children and they are under 18 years old, then you can appoint a guardian for your children in your will. This appointment only takes effect if there is no one else with parental responsibility over your children when you die.
If you already have a Will, it is recommended that you review it every 2 to 5 years. Sometimes your wishes may not have changed, but the value of your assets and the law may have. As such it is very important to ensure that your Will does exactly what you want it to do; that it protects your assets and investments, and most importantly that you have taken advantage of various areas of flexibility within the law of estate planning.
Yes – all wills can be challenged. The real question is ‘can my will be successfully challenged?’
If your Will includes your nearest relatives and dependents such as your husband, wife or civil partner and your children, there is little reason why your will should be challenged. But, if you exclude someone who might expect to benefit from your will, or there is a suggestion that you did not have mental capacity or have been influenced or coerced whilst making your will, then there is a real possibility your will could be challenged.
You can reduce the risk of a successful challenge by getting your will professionally drafted with the help of a will writing specialist. A properly drafted will is more likely to hold up to any future challenge.
Talking to your family and loved ones about your will is also important, particularly if you are going to exclude them. This prevents questions about your motivation after you’ve died. Alternatively, you could write a Letter of Wishes to your executors which sets out the reasons why you’ve excluded a particular person from the will, this Letter of Wishes can be stored with your will.
Trusts
What is a trust in a Will?
Trusts in Wills are widely used in England & Wales but not everyone really understands what a Trust Will is and how it works.
A Trust exists when one or more people look after property or other assets for the benefit of one or more other people. Trustees are the people who look after the property in the Trust for the benefit of others.
Trusts in Wills are most frequently used to protect property, and they’re widely used when providing for children in a Will or when taking care of vulnerable loved ones.
The people who look after the property in the Trust are called Trustees, the people who stand to benefit from the property in the Trust are called Beneficiaries.
What do trustees do in a Will?
If your Will creates a Trust then, once your Executors have carried out the terms of your Will, the Trustees will go on to manage the Trust property for however long the Trust lasts. Trustees normally have the same amount of control over Trust property as if they owned that property themselves however the terms of the Trust are set out in your Will.
Trustees owe a legal duty to the Trust’s beneficiaries, meaning they must manage the Trust for the benefit of the beneficiaries and must act in the beneficiaries’ best interests at all times.
Being a Trustee can be a difficult and time-consuming role, and Trustees will often need the support of legal experts and/or a Solicitor that specialises in Trusts if they are to carry out their roles correctly.
Trustees should be trustworthy, financially responsible and have good administrative skills. It’s important to talk to someone you’re considering as a Trustee before you appoint them. You should also get them to agree to their appointment, as a reluctant Trustee may not be nearly as effective as a willing Trustee or may even refuse to act after your death.
Different Types of Trusts
Life Interest Trust (also known as Immediate Post Death Interest or IPDI) allows the intended beneficiary (Life Tenant) to have a lifetime interest in the asset/s and then states who shall inherit said assets following the death of the Life Tenant. One of the most common reasons for the use of a Life Interest Trust is to protect against what is known as ‘sideways disinheritance’. Sideways disinheritance is simply the common act of the spouse/partner of the deceased remarrying or recoupling and deciding to favour the new family in their Will. This could result in the intended beneficiaries of the deceased, often their children, receiving less or even no inheritance.
The Property Protection Trust (PPT) is a Life Interest Trust incorporated into a Will which allows the testator to give a lifetime interest in their share of the main residence to a beneficiary of their choice. By giving a lifetime interest means that the Life Tenant will never own the property however they will be entitled to lifetime enjoyment of the property and any income which may arise (i.e. if they decide to let the property out). When the Life Tenant no longer has a right to benefit from the property due to their death or by termination of the trust, the property is subsequently passed to the beneficiary/ies as described in the Will.
The Flexible Life Interest Trust (FLIT) incorporates two separate Life Interest Trusts into a Will. The first Life Interest Trust concerns your main residence (much like the PPT) and the second trust captures the residue, minus chattels (personal possessions).
The trusts give a lifetime interest in the property and residue to a beneficiary of their choice, this beneficiary would be called the Life Tenant. Giving them a lifetime interest means that the Life Tenant will never own the assets that are held in trust absolutely, however they will be entitled to lifetime enjoyment of the property and other assets and any income which may arise (i.e., if they have rentals or income producing investments). When the Life Tenant no longer has a right to benefit from the assets due to their death or by termination of the trust, the property is subsequently passed to the beneficiary/ies as described in the Will.
A Discretionary Trust is a trust which leaves the distribution of the trust property (either capital, income, or both) to the absolute discretion of the Trustees. When choosing to set up a Discretionary Trust within a Will the trust does not come into effect until the testator dies, once the trust is set up the assets within it are held by the Trustees. The Discretionary Trust gives the Trustees the discretion to either retain and hold the assets within it or distribute all or some of the assets between a given list of named ‘potential’ beneficiaries. The beneficiaries are only ‘potential’ beneficiaries because they have no absolute entitlement to any of the trust assets, as distribution is at the sole discretion of the Trustees as described.
A letter of wishes should be present to help the Trustees to understand what the testator’s intentions are with regard to benefit from the trust.
This is a Will that incorporates one Discretionary Trust. The trust may cover the whole of the estate or it may be relevant to only one beneficiary’s share. As the Discretionary Trusts are so flexible the need will vary on a case-by-case basis, the finer details are incorporated into the letter of wishes which is included with each of these Wills.
This type of trust is added in addition to any type of Will and covers only the business assets that qualify for Business Property Relief. The Business Property Trust (BPT) is a form of Discretionary Trust written into a Will which attracts all assets owned by the testator that qualify for 100% Business Property Relief (BPR) at their death. The purpose of the BPT is to make use of the IHT relief gained by certain qualifying business assets by transferring such qualifying assets into trust without this particular transaction affecting the available Nil Rate Band of the deceased.
The BPT can be a very effective tax-planning solution.
This type of trust can be used for unmarried couples who have a joint estate above the Inheritance Tax Nil Rate Band (currently £325,000.00 in 2021 – 2022 tax year). The NRBDT utilises individual’s Inheritance Tax allowances with a loan facility to create a debt on the second death, meaning that if used correctly the second death estate can see a tax reduction on a sum up to the Nil Rate Band (40% currently on £325,000.00 in 2021 – 2022 tax year).