Docklands Solicitor

- If the answer is ‘NO!’ then you need to consider how you own your assets, and the available estate planning options to help you preserve them for your children, or your side of the family.

- If you own your property with your spouse as ‘Beneficial Joint Tenants’, effectively you both own 100% of the property, which means that on 1st death the surviving joint tenant will inherit by ‘survivorship’ and the property cannot be passed to anybody else, no matter what your Will says.

- So if the survivor then remarries, and again owns the property as joint tenant with their new spouse, if the survivor predeceases them, the new spouse will take the whole property, and your own children would receive no part of it after the death of both their parents.

- How can you avoid this situation? The first step is to sever the ‘Joint Tenancy’ to ‘Tenants in Common’ so that you both own 50% of the property, and can then each leave your 50% via your Will. The next step is to include a Trust in each Will, to appoint your children as ultimate beneficiaries, but providing a ‘life tenancy’ or ‘right to reside’ (eg until they remarry) for the surviving spouse, so they can continue to live in the property, but cannot pass your share onto your replacement!

- There are many areas of flexibility that can be built into such Trusts, and professional advice should always be sought from a Solicitor or Will writer specialising in Estate Planning.

Labels: beneficiaries, estate, joint tenancy, Survivor, tenants in common

- Many charities could not survive without the legacies and gifts left to them through Wills of people who have decided to leave them something after they have died – afterall, many people have no family they wish to leave assets to, or their potential beneficiaries may not need their money; as if they are wealthy in their own right it would only add to their own inheritance tax liability.

- Just like any other beneficiary, Charities can be fiercely determined to ensure they get every penny available to them, and they have very well developed legal departments to ensure this happens! As a result we often hear of family members who have been appointed as Executors being ‘harassed’ by these charity representatives who ‘want their money and want it now’. The charities afterall are not the ones who have just lost a loved one, and this unwanted extra pressure comes at an already very stressful time. If you find yourself in this situation it is best to employ the services of a Professional Executor, such as a Solicitor, to keep the circling sharks at bay.

- In addition it is always advisable to take professional estate planning advice when making your Will if your estate comes to over the ‘Nil Rate Band’ (NRB) which is the amount of money (currently £325k per person) which you can leave free of Inheritance Tax (IHT) to a ‘taxable beneficiary’ - being anybody other than your spouse/civil partner, the government(!) or a registered charity.

- This means that, if your estate is worth over £325k, anything over this NRB will be taxed for IHT at 40%, if you are leaving it to taxable beneficiaries.

- Charity gifts are free of tax, so if you are leaving your estate to eg your 2 children and a charity in equal shares, the charity’s share is tax free, and any tax payable will be borne by your children’s shares!

- But it’s not all bad - you can use gifts to charity in your Will to bring your estate down below the NRB so that anything you then leave to your children would be totally free of IHT!

Labels: beneficiaries, charities, gifts, IHT, tax, Wills