Case Study 1

Mr P is single, with two elder sisters (one divorced and one single), and three nephews. He wants to ensure that, if he dies before his sisters, they would be financially secure. However, if all he left were added to the value of his sisters’ homes and savings, then on their deaths there would be inheritance tax payable. However, if he were to leave everything to his nephews, any of them might divorce in the future, and the ex-wives (rather than his sisters) would benefit.

We suggested drawing up a Will in which all he leaves is placed in a discretionary trust, the potential beneficiaries of which would be his sisters, his nephews, their children, and any other person he wishes to name. His sisters would be appointed as Executors and Trustees; in that way, after his death they could take whatever they needed for their needs from the trust over a period of time, and the remainder could be passed to his nephews (or their children) in due course or as and when they needed it. The assets or money which is not distributed would remain in the trust (for up to 125 years if necessary), and would not be included as part of the estates of his sisters or nephews on their death, so no inheritance tax would be payable on their estates as a result of their being able to access all his assets.

Case Study 2

Miss P is in her seventies and has a sister of similar age who is widowed with very little money. She wants to ensure that, should she die first, her sister is provided for; in addition, since her sister lives in a modest flat, she would like her sister to have her home. However, her sister is in fairly poor health, and Miss P is aware that if she leaves everything to her sister there is always the possibility that it will all go in care fees of perhaps £750 per week. We made several suggestions to Miss P, and as a result of our suggestions we were able to draw up a Will whereby Miss P’s sister would be able to live in the home, and have access to all Miss P’s savings, without the risk of a single penny of this going to the local authority if her sister should need care.

Case Study 3

Mr & Mrs K are both in a second marriage, their previous marriages ending in divorce. They each have two children from their respective first marriages. They own a home together, but have their own savings. They want to ensure that, when one of them dies, the survivor can continue to live in their home, and have access to their savings, but on the death of the survivor it is the wish of both of them that the home and the remainder of their own savings are divided between their own respective children.

We explained to the clients how we could draw up Wills whereby not only could their wishes be respected, enabling the surviving spouse to live in the home and have use of all the income from the savings and even the capital if necessary, with one half of the home and the unused savings of the first to die passing on second death to his or her children (rather than the children of the second to die), but would also enable part of the estate of the first to die to pass to his or her children if circumstances allowed this without waiting for the second death, with the opportunity for reducing or even eliminating a liability for inheritance tax which would otherwise become due on second death.

Case Study 4

When Mr J, a widower, approached us to prepare his Will, he was unsure about what to do, since his only family was two nieces who lived in Australia, the daughters of his late brother of whom he was very fond.

After discussing his situation and his wishes, we prepared a Lasting Power of Attorney whereby he appointed us as his attorneys, enabling us to deal with his financial affairs if (and only if) he became unable to do this for himself. We drew up a Will leaving all he owned to his nieces, and went through with him what his wishes would be if he needed care, and what his funeral wishes were.

By doing this, we were perfectly positioned to ensure he had no problems or worries if he started to find everyday finances a little confusing, we knew not only what sort of funeral to arrange when the time came but also who to contact at that time, and in the meantime we were only a phone call away in the event that he had any problems at all dealing with those everyday matters that the younger among us take in our stride (Have you ever tried getting any sense out of British Gas?).