Category: Trusts

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Executors Review will Trusts Uncategorized Wills

6 occasions to review your will

What follows are 6 occasions on which you should review your English and Welsh will.

  1. Marriage
    If you marry, your existing will is automatically revoked. This is unless your will was written in contemplation of that marriage and an appropriate clause is included in the will to state this.
  2. Divorce
    If you divorce, any gifts in your will to your former spouse or civil partner are made void. Also void are any appointments of them as an executor, trustee, or guardian. You should also review your will planning if a beneficiary of yours divorces or is in the process of going through a divorce.
  3. Sell or move home
    A home, for many people, is their most valuable asset. If you no longer own that asset it is a good idea to review your will – you might want to leave a different asset to your beneficiaries instead. Also, if you store your will at home, it is important that it does not become lost during the move!
  4. Change in family circumstances
    Relationships change over the years and unfortunately friends and family we were once close to may drift away or die. On a happier note, new potential beneficiaries are born, new relationships formed, and previous relationships repaired. Your will should be reviewed as your circumstances change.
  5. Change in the law
    If tax law changes and your will isn’t kept up to date your estate may end up paying more inheritance tax (IHT) on your death. For example, in 2017 there was a change to UK IHT which introduced the residence nil rate band – an IHT allowance that can be available where your home is gifted to your children (or other direct descendants). If your will contains provisions that create a trust on death, it is important to review these if trust law changes.
  6. Every 3 to 5 years
    Review your estate plan every 3-5 years to make sure that your will still matches your current wishes. 
Categories
Property ownership Trusts

What does it mean to own property as joint tenants or as tenants in common?

With a joint tenancy, the co-owners own 100% of the property simultaneously. And if, for example, a property were to be owned by two joint tenants and one of those owners were to die, the surviving owner would become the sole owner: this is known as the ‘right of survivorship’.

With a joint tenancy, the first-to-die does not have an identifiable share of the property to leave to someone in their will.

For tenants in common, however, each co-owner does have an identifiable share of the equitable interest in the property. This identifiable share does not pass under the ‘right of survivorship’ on death. It is important, therefore, for someone who owns such a share to make a will. The will can set out who is to benefit from the share on death.

Many will trusts make use of the family home being held as tenants in common. Will trusts can help each co-owner arrange how their share will be managed after death.

Categories
Trusts

What is a discretionary trust?

A discretionary trust is a type of trust where the trustees have complete discretion to pay or apply the income or capital of the trust fund for the benefit of one or all of the beneficiaries. No particular beneficiary has an interest in the trust or an entitlement to the trust funds – they only have a potential interest until the trustees actually exercise their discretion in the beneficiary’s favour.

A discretionary trust can be included within a will. It is generally advisable for the testator to write a letter of wishes accompanying the will which provides guidance to the trustees on how they would like the trust fund to be distributed. Letters of wishes are not legally binding, therefore, there is no obligation for the trustees to follow them.

A discretionary trust can provide flexibility.