You will probably have a family member or a friend who was married, got divorced and now lives with a partner. They are not keen to remarry. One of the things they will find difficult is planning the distribution of their Estate. Let us take an example of Mr Smith who is divorced with one child (John) from his previous marriage who now lives with a new partner being Mrs Brown who is also divorced. Mr Smith and Mrs Brown have a child (Mary) together. Mr Smith has two children and Mrs Brown has one child. Mrs Brown does not get on particularly well with John.
Mr Smith is concerned that if he dies first his assets will all go to Mrs Brown who will leave everything to Mary, meaning John will not inherit anything from him. Mrs Brown is concerned that if she dies first all assets will go to Mr Smith and when he dies Mary will not get a fair distribution.
There is not one solution to this type of situation. Much will depend on the relative wealth of Mr Smith and Mrs Brown and who owns the house in which they live.
We do have a trust that holds assets between first and second death and this often is enough to ensure a solution in this type of situation. Furthermore, this trust can reduce the total inheritance tax liability by up to £130,000.
This type of situation is delicate and it is easy not to talk about the subject. However, we have many clients who are partners and have told us how pleased they are with the advice we gave them. They tell us that the solution we implemented gives them much “peace of mind”.
If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.