Q: We have lived the past ten years in dread of our daughter marrying her lazy partner, but at Christmas she announced they will marry in the Summer of 2020. As our only child she is the sole beneficiary of our Wills. Now we are terrified that our future son-in-law could end up with half her inheritance if they later divorce - if he hasn’t already squandered it away - and that our two grandchildren will not benefit later on. Is there any way we can put conditions in our Wills to protect our assets solely for the benefit of our daughter and grandchildren?
A: It is possible to impose conditions in a Will but the legislation surrounding conditions in wills is very complicated, and conditions can be declared void for a number of different reasons. If this happens, the gift may fail or the recipient of the gift may receive it without the condition being imposed.
The safest way to control what happens to your assets after you die is to set up a discretionary trust and appoint trustees to manage it. The trustees can be the executors of your Will or they could be professional trustees. The trustees can decide to pay capital or income to your daughter as they see fit. Your solicitor can set up the discretionary trust and can also draft a ‘letter of wishes’ to guide your trustees. This can include your wish to protect your assets from being included in any divorce settlement.
It is quite common for discretionary trusts to be created to protect a beneficiary in divorce. Under current legislation, an added advantage is that any monies remaining in the trust at the time of your daughter’s death would not attract inheritance tax when it passed down to your grandchildren.
Article 09/03/2020
