How a Trust can protect your children from becoming disinherited
Recently in the News is the distressing story of Linda Bellingham's two sons in a dispute over her Will with her surviving husband. The exact details of the Will itself have not yet been made public but there are some clear lessons which people wanting to reduce the risk of similar disputes need to be aware of.
Marriage has an advantage for large estates that are above the level of £325,000 at which inheritance tax may be due. Whatever is passed on death from one spouse to the other is initially free of inheritance tax. There is therefore the temptation to leave all to the surviving spouse without any special arrangements. The problem is that unless the Wills are structured with safeguards for the children, there is no guarantee that the deceased's original children will inherit what the deceased wished to happen, and can lead to disinheriting your children.
One typical way of doing this is for a married person with substantial assets setting aside some of the assets into a legal arrangement called a trust to provide an income to their surviving spouse. This can then be limited to a set period, an event with an eventual distribution to the original children.
In this arrangement, the tax advantages that marriage offers would be used, but also the interest of children protected.