Contrary to popular opinion, the act of marriage/civil partnership automatically revokes an existing will unless you include a special clause in the original will stating that the Will is not be revoked.
When married, without children, your spouse/civil partner inherits your entire estate if you do not have a Will. While this may well be your plan anyway, there are circumstances where you may want your possessions, business or property to be inherited by people other than your spouse/civil partner.
To help you understand how later life planning can feed into your new marriage plans, we’ve summarised two key considerations.
- Passing wealth down to children from a previous relationship
When marriage revokes a Will, your estate pass in accordance with the intestacy rules (subject to any assets held jointly which pass by the rules of survivorship). Under the intestacy rules, depending upon the value of your estate, all or the majority of it would pass to your spouse/civil partner, leaving your children with little or nothing. This can be particularly contentious for children from a previous marriage as your wealth if passed to your new spouse may then pass to their new partner on their death or family.
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, a life interest trust can be used to provide for the spouse/civil partner whilst protecting those assets for the children upon the spouses/civil partners death.
- Mitigating tax
Should your net estate exceed the Inheritance Tax (IHT) threshold (currently £325,000) and the residence nil rate band allowance (currently £175k provided all conditions are met), 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.
By careful tax planning you could mitigate your liability to IHT. For example, by making gifts seven years before your death or investing in IHT efficient products. A large portion of later life tax planning is achieved by creating a will.
For later life planning and support, please get in touch with our expert team today.
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