Why use a trust in your Will? Will trusts are used to protect assets against possible future events such as remarriage or care fees. The assets are held in a Will trust for the ultimate benefit of your chosen beneficiaries – often your children – after death.
For example, let’s say a married couple, Robert and Joanna, have two children together and jointly own a house worth £800,000. Robert sadly dies.
With no Will OR a standard Will leaving everything to the surviving husband or wife
Robert’s half share of the house passes to Joanna automatically on his death, because like many married couples, they own their house as ‘joint tenants’. Joanna then owns 100% of the house and it is hers to do with as she wishes.
Remarriage
If Joanna later remarries, the house could then pass to her new husband on her death or on a subsequent divorce, which means that Robert and Joanna’s children may not inherit anything.
Nursing Home Fees
If Joanna ends up needing nursing care, she will be obliged to use 100% of the money in the house to self-fund care costs until she has only £23,250 left. When Joanna dies, the children may only inherit the £23,250 which is left.
With no Will or a standard Will in place, Robert and Joanna’s children may not inherit anything at all.
Total inheritance:
£0 – £23,250
With a Will Trust for the long-term benefit of your spouse and children
Alternatively, Robert and Joanna set up Will trusts. The title to their house is amended when they make their Wills so that they own it as ‘tenants in common’ instead of ‘joint tenants’. On Robert’s death, Joanna continues to own 50% of the house outright and Robert’s 50% share is put into a Will trust to protect it for the long-term benefit of Joanna and their children.
Remarriage
If Joanna remarries, Robert’s 50% share of the house is still protected within the Will trust so that it can’t pass to her new husband when Joanna dies or if they divorce. Robert and Joanna’s children will still inherit at least £400,000.
Nursing Home Fees
If Joanna needs nursing care in her later years, she would need to use up to 50% of the money in the house to self-fund her care costs, until she has only £23,250 left. The other 50% of the house is protected within the Will trust. On Joanna’s death, the children still receive £423,250.
With the protection of a Will trust, Robert and Joanna’s children will receive a sizeable inheritance.
Total inheritance:
£400,000 – £423,250
Make a Free Enquiry
Call Rebecca D’Arcy of Chiltern Wills on (01494) 708688 or complete a free online enquiry and Rebecca will be glad to discuss with you how Chiltern Wills can help you to put in place a Will trust to protect your children’s inheritance.
