One of the first significant considerations you will need to think about when planning or reviewing your Will is who your dependents are – who relies on you financially or for care.
Obviously, this could include a spouse, civil partner or co-habiting partner, along with any children you may have. This isn’t limited to your natural children; you may have adopted or step-children you will need to consider. It may also include anyone you have been caring for or looking after financially, such as elderly relatives or a child with a disability.
If you and your partner are not married or in a civil partnership, it is vital that you have a Will to protect them should you die. If you don’t, the proceeds from your estate will pass to your children or to other relatives if you have no children. If there are no relatives, your estate will pass to the Crown (in reality to the Treasury!). Under the 1975 Inheritance Act, your partner would have to make an application for some of your assets, but this will take time and money.
If you and your partner die before your children are 18 years old, they will need a Guardian to take responsibility for them. If you don’t appoint Guardians for minor children, Social Services & the Courts will decide who looks after them – and it might not be the family or friends you would have intended.
You may also consider setting up a Trust, to cater for the financial costs of being a Guardian while ensuring your assets are protected for your children until they are sufficiently capable of managing them in their own right. Usually a Guardian will be one of the Trustees, but it’s advisable to appoint someone independent as well, to help the Guardians and ensure there is no conflict of interest – as they may have to make decisions that will affect the Guardian’s family too, such as the purchase of a larger car or even a property.
More thought also needs to go into providing for a child with disabilities. If you have more than one child, it is natural to want to provide for them equally. That said, sharing the proceeds of your estate equally between your children may not be in the disabled child’s best interests.
If you plan to leave a lump sum to each child, you need to assess whether or not the disabled child would have the capability to make decisions for themselves. If they don’t have capacity to deal with their financial affairs, a Deputy may need to be appointed, which would eat into some of the funds of their inheritance.
You will also need to consider whether any inheritance left to a disabled child will affect their entitlement to means tested benefits. If it does, their inheritance may have unintended consequences that leave them worse off financially rather than better.
Again, setting up a Trust to provide an income for the disabled child is often a sensible approach to avoid the situations above.
There are different types of Trusts to consider and Trust law is complex, and you need to take advice from a qualified professional in the area of Will writing & estate planning.
Heir Tight Wills helps clients put in place robust provisions and valid documents, to protect their loved ones and their assets both during their lifetime and after their death. For a FREE Consultation to discuss writing or updating your Will & estate planning provisions, contact Rachael Rodgers on 0845 519 7585, or CONTACT US via email.