There may be a situation where you want to leave an inheritance to your children but you have concerns about their spouses being able to take control of it. Today at S Bish Estate Planning we address these concerns and look at various strategies to safeguard family assets.
For example, if their marriage is problematic with a risk of divorce, any money your child receives as an inheritance will be at risk when a financial settlement is made. The court could decide that their spouse should receive half or even more than half, depending on the circumstances.
Alternatively, the inheritance could be at risk in another way, if your child’s spouse is facing bankruptcy or might be investing in a risky business.
If you want to protect your estate so that your child can benefit from it for the rest of their lives, you may want to consider this when making your Will.
Make sure you leave a Will
The first step is to make sure that you make a Will.
Without a Will, your estate might not pass to the beneficiaries whom you would want to receive it as all of your assets would pass in accordance with the Rules of Intestacy. These rules set out in strict order of priority who will inherit and how much of your estate they will receive.
By way of example, if you are married and you have children, then your spouse will inherit the first £322,000 of your estate plus all of your personal possessions. The remainder of your estate will be split in half and your spouse will receive one half. Your children will share the remaining half equally.
In some situations, this means that your children could receive substantially less than your spouse, which might not be what you want. It could also see an estranged child inheriting and even sharing ownership of your bereaved spouse's property.
Consider putting assets in trust
You can take steps to protect your assets for your children by using your Will to put the assets into a discretionary trust. This means that the trustees can use the assets to benefit your children and you can leave a letter of wishes outlining how you would like this to be done.
Money held in trust is not completely guaranteed to be safe from divorce however and it is important to take legal advice to ensure that you structure your estate in the best way possible for your circumstances. The court may still decide to take trust assets into account as a financial resource when assessing how much each party should receive. However, it can often be preferable to try and protect assets as far as possible by setting up a trust to benefit your children, rather than leaving them money outright, which would certainly be taken into account by the court in dealing with financial matters on divorce. Another option is to set up a Lifetime Trust where you settle assets into Trust before you die.
Contact us
Before doing any of the above it's highly advisable to seek expert advice.
For more information call us on 01727 220930 or email at contact@sbishestateplanning.com
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