Contrary to popular opinion, the act of marriage and civil partnership can revoke an existing will, usually leaving your legal partner as the major beneficiary to your estate.
While this may well be your plan anyway, there are circumstances where you would want your possessions, business or property to be inherited by people other than your husband, wife or civil partner.
To help you understand how later life planning can feed into your new marriage plans, we’ve summarised three key considerations.
1. Passing wealth down to children from a previous relationship
When marriage overrides a Will, your estate could be divided by the laws of intestacy. Under these rules, the majority of your estate may be passed directly to your new partner. This may leave children from a past relationship out of pocket.
By rewriting your Will after marriage, you could express your wishes as to how you would like your possessions distributed and when they can be collected. For example, money could be put into a trust for very young children, only accessible when they reach adulthood.
2. Pay less tax
Should your estate exceed the Inheritance Tax (IHT) threshold (currently £325,000) and the residence nil rate band, it could attract IHT at a rate of 40 per cent. Depending on the size and contents of your estate, this may mean selling goods, property and even your business to pay the tax bill.
But careful tax planning could mitigate the severity of the impact of IHT. For example, gifts made out seven years before your death or placing wealth into a trust could save your loved ones thousands of pounds in tax. A large portion of later life tax planning is achieved by crafting a watertight will.
3. Keeping wealth in the family
You would probably like your surviving spouse to continue living in the family home and benefit from your pension or other assets after you’re gone. But have you considered what would happen to your estate after they pass? Without a Will expressing your wishes, it’s likely that your whole estate could be passed to their family, rather than your own.
By drafting a Will, you can state exactly how your assets should be used and passed down. For example, you could give your surviving spouse life-long rights to your home, providing the estate is then passed back to your own family on their death.
For later life planning and support, please get in touch with our expert team today.