The most basic advice for Wills is that everyone over the age of 18 years should have an up-to-date Will. It goes without saying that we would advise this. However, it is not the simple fact of ‘making’ a Will or having something ‘put in place’ that is important but rather it is gaining the knowledge of options for best making gifts and taking the care to make your Will effective that counts. Our role is to educate and empower our clients to pass their estate in the best way to ensure it passes to chosen beneficiaries protected from outside attack and claims. Such a process is a cornerstone of our work.

As an update, we continue to advise the use of Flexible Trusts within most of our clients’ Wills. This often provides the best flexibility in the changing landscape of government taxation, personal and family circumstances. Our clients are finding that their wish to protect what is passed to their family is as strong as ever. A Flexible Trust structure is one that incorporates the a ‘Discretionary Trust’ and/or a “Flexible Life-Interest Trust” within the Will structure. If you have a trust will in place, it is still good advice to keep it and review it.

Updating Wills

Trends with how trust structures are set out with Wills have only recently altered.  Government decided to require most trusts to be formally registered with the HMRC Trust Registration Service.  Most existing trusts of significant value (over £100) will require to be registered by no later than March 2022. We will be in touch with you to deal with this for any trusts that relate to you or your estate. It should not be onerous but it is necessary to keep up to date with legislation and compliance.

Housing Trust elements within the body of the Will (rather than outside of it)

Recent trends with Wills are to house all trusts that relate to the Will within the body of the Will itself (namely both the discretionary trust and/or life interest trusts) rather than being set outside of the Will in separate documents. This means that the trusts come into existence as at the date of death. The primary benefit therefore is that the Trusts within the Will do not become active until death and therefore such trusts do not require prior registration. But there are also other benefits:

  • Due to the fact that the trusts would not start their ‘lifespan’ until following the date of death of the testator it means the maximum use can be made of commencing the trust from that date, rather than from the date of when the Will was drawn up. Trusts have a standard 125 year lifespan (through which successive loans can be made to successive generations of your family, retaining the protection of the trust for that whole period potentially).
  • HMRC taxes trusts at 10 yearly intervals from the commencement of the trust. For trusts contained within the body of Wills, the tax period commences following date of death (rather than from the date of making the Will), and there is potential for the use of the 10 year allowance period before the 10 yearly charge applies.
  • There is a practical benefit of having the one document (the Will) containing all the trusts, rather than separate documents containing separate trust provisions. The only other document is the Memorandum of Wishes which guides the operation of the trusts. It is neater and enables the housing of all of the terms within one document.

Therefore, if you have Will-trusts with the trust set outside of the body of the Will, we ought to think about reviewing this to update it to include them within the body of the Will.  It is not essential to do so but it is usually our best advice.   

For those who have trust wills already and who have more than one child who is ultimately inheriting your Estate:

Consider updating your existing Will to include a separate trust for each of your children to manage rather than a ‘blanket’ family trust which they together control.  Recent trends are to advise that each child should have their own trust, and (once of sufficient age) to be the primary trustee on their own trust. That way, one child does not have the potential to interfere with their siblings wishes and decision making processes. Additionally, one child may have different requirements to other children which are personal to them (say, for divorce protection) and it is often important that each child can take their own decisions.

For those who have Basic (Non-Trust) Wills:  

For married couples you may not realise that basic Wills (even if they are “mirrored” in fashion) are not sufficient to ensure that the estate of the first spouse will end up with their children following the death of the surviving spouse. Re-marriage, change in personal circumstances, care costs and Inheritance Tax can affect this.

For those who have children but who are widowed, single or divorced consider what the impact may be on those children who are receiving your inheritance. How can you best protect it for them as against divorces/their own inheritance tax position/loss of benefits/care fees claims?  Consider reviewing those Wills to put in Flexible-Trust structure if you:

  • Have a property and wish to protect it to pass to your children irrespective of providing your surviving spouse the full use and benefit;
  • Wish to ensure IHT protection for children inheriting your estate;
  • Wish to ensure that other third parties (such as divorcees) do not lay claim to assets passed by you to your spouse or children;
  • Inherit monies from parents or other relatives and wish to understand the implications for your own Estates in terms of your estate’s future IHT;
  • If overall your Estate assets are less than £650,000 and you have not considered how care costs could impact your Estate passing to children/family;
  • If your estate assets exceed £650,000 (between a married couple) and you have not received advice regarding updated IHT legislation; or
  • Are leaving the majority of your estate to charity (a Charitable Trust is the structure we now recommend for best administration).

Digital Legacies

Another recent trend is to make specific provisions within your Will or side documents as to digital assets.  They could include social network profiles, online photos, email accounts and music libraries. When we next review your Will, consider whether the family would need guidance.  We can provide a suggested approach.

Executor/Trustee of a Will or Trust.

If you are a future Executor/Trustee consider whether you have an adequate understanding of the nature of the role and whether you would require a refresher/update.  For your own Wills, do you believe your Executors and Trustees know their responsibilities and duties under the Wills?  Particularly if trusts are involved, do they understand what to do?  We have leaflets and information we can now provide you and those who are appointed to the roles. We suggest you have a meeting/discussion/video-call to discuss this specifically – so that you can have a focus on this one important aspect or register for our seminar below.

Executors Duties – Zoom-Call Seminar

We are planning to hold a zoom-call seminar for our clients and contacts in the summer to set out and explain the duties associated with being an Executor or a Trustee of an Estate or Trust. We have had a number of people asking for clarification in this area and we have found a need for clear explanation on what is entailed with the roles and responsibilities. If you are interested in attending a seminar from us on this, we would be grateful if you would email Lauren (lauren@robertcartmell.co.uk) to register your interest and we will let you know when this will take place.