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Estate Planning, Wills and Trusts

Your approach to making your Will can make such a big difference

The fictitious examples below show how different married couples approached their Will and demonstrates that not all Wills are the same, and that a cost effective trust can make the difference between your loved ones inheriting everything and inheriting nothing at all.

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Five different families with different approaches to the same scenario. See how it turned out for each different family.

1. Mr & Mrs Smith never made a Will

Mrs Smith didn't make a Will and her children inherited nothing.

Mr & Mrs Smith were married and had four children. They had a combined estate of £250,000. They hadn’t got around to making their Wills.

Mr Smith died, and the estate passed in full to Mrs Smith due to the rules of intestacy. Mrs Smith Married Mr Arnold who had one Son. Subsequently, neither Mr Arnold nor Mrs Smith made a Will.

Mrs Smith then died and because of the laws of intestacy the estate passed to Mr Arnold. On his death, it passed to his Son.

Mr & Mrs Smith’s natural children got nothing at all!

Mr & Mrs Smith paid nothing and their children never inherited a thing.

2. Mrs Jones didn't make her Will after she remarried.

Mrs Jones forgot to make her Will again after she married, and the children inherited nothing.

Mr & Mrs Jones were married and had four children. They had a combined estate of £250,000. They made mirror wills where everything passed to the survivor on first death, and then shared between the children on the second death.

Mr Jones died, and the estate passed in full to Mrs Jones in accordance with the Will. Mrs Jones married Mr Arnold, who had one son. Mrs Jones kept her existing will safe. She didn't realise that her Will was invalid because she remarried.

Mrs Jones died and because her Will was invalid, the laws of intestacy determined her estate passed to Mr Arnold. On his death, it passed to his Son.

Mr & Mrs Jones' natural children got nothing at all!

Mr & Mrs Jones paid for a Mirror Will (around £180), but lost everything due to an oversight. Some people might not remarry, however this is a very common problem which happens on a regular basis. It is an easy thing to forget!

3. Mrs Green did make another Will after she remarried, however the assets were left unprotected when she inherited them from Mr Green.

an unprotected will can leave your children with nothing

Mr & Mrs Green were married and had four children. They had a combined estate of £250,000. They had mirror wills where everything passed to the survivor on first death, and then shared between the children on the second death.

Mr Green died, and the estate passed in full to Mrs Green in accordance with the Will. Mrs Green married Mr Arnold, who had one son. Mrs Green made a New Will where her estate would pass to her four children.

Mr Arnold and Mrs Green divorced, and a proportion of the estate was lost as part of the divorce settlement. Mrs Green then went into residential care for two years before she died.

These events left £20,000 in her estate, and after funeral costs, the children inherited £3,000 each.

Mr & Mrs Green paid for a Mirror Will (around £180), and Mrs Green made her Will again after she remarried (around £110), but all the assets where unprotected, and were swallowed up by a divorce settlement and care home fees, leaving little for the children to inherit.

4. Mrs Smart did make another Will after she remarried, and half the assets were protected after Mr Smart died because they put a Trust in the original Will.

an asset preservation trust can ensure your assets are protected and your children inherit as intended

Mr & Mrs Smart were married and had four children. They had a combined estate of £250,000. They had mirror wills, and an Asset Preservation Trust was put into the Will.

Mr Smart died, and half of the assets went into the trust. Mrs Smart was able to utilise the capital in the trust if she needed to. Mrs Smart had full access to her share of the estate too, which did not go into the trust. Mrs Smart married Mr Arnold, who had one son. Mrs Smart made a New Will where her estate would pass to her four children.

Mr Arnold and Mrs Smart divorced, and a proportion of Mrs Smart's assets were lost as part of the divorce settlement. Mrs Smart then went into residential care for two years before she died.

These events left £20,000 in her estate, however the money in the trust was protected for the eventual benefit of the children, and after funeral costs, the children inherited £34,250 each.

Mr & Mrs Smart paid for a Mirror Will (around £180), and an Asset Preservation Trust (around £400) and Mrs Smart made her Will again after she remarried (around £110). Half of the assets where protected by the trust, and the rest was swallowed up by a divorce settlement and care home fees, leaving a total of £137,000 for the children to inherit after funeral costs.

5. Mrs Jackson did make another Will after she remarried, and all the assets were protected at outset, as they put them into a Trust straight away rather than putting the trust into the Will.

A lifetime trust is more costly, but provides significantly more benefit.

Mr & Mrs Jackson were married and had four children. They had a combined estate of £250,000. They had mirror wills, but also put the estate assets into a Lifetime Family Asset Preservation Trust whilst they were alive. They could access this money and it provided some protection for the assets.

Mr Jackson died, and the money remained in the trust. Mrs Jackson made a new Will and was able to continue to draw the capital and live off the income as needed from the trust.

Mrs Jackson married Mr Arnold, they got divorced, but the assets in the trust were protected. Mrs Jackson then went into residential care for two years, and the assets in the trust were protected.

On death, the assets of £250,000 which had been protected, were available and children received £60,500 each after funeral costs.

Mr & Mrs Jackson paid for a Mirror Will (around £180), and a Lifetime Family Asset Preservation Trust (around £2,000) and Mrs Jackson made her Will again after she remarried (around £110).All of the assets where protected by the trust, and was unaffected by the divorce and the carehome fees, leaving a total of £137,000 for the children to inherit after funeral costs.

In conclusion

These are typical examples of how life might pan out. But life will be different for everyone.

Trusts provide a huge amount of protection compared to just making a Will. It might be fine to just make a Will, and then again, it might not. We do not know what tomorrow brings.

A trust might seem expensive now, but it could make the difference of the final beneficiaires inheriting literally hundreds of thousands of pounds more than they would do without the trust.

There are few guarantees in life, but trusts can help protect assets when times get hard.


Call Goodwills on 01666 744002 or email goodwills@willsandtrusts.co.uk for further information or to make an appointment.

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