Q: I have not updated my Will for many years but will need to as my husband has applied for a divorce. I want to leave my entire estate to my daughter, but I want if possible to ensure it goes to her alone and my son-in-law doesn’t benefit. It isn’t that I have anything against him, and they seem to be very happily married, but then I thought I was happily married and my husband just upped and left me for someone half his age after 41 years of marriage. And he benefited from my own inheritance! Can I protect my daughter’s inheritance for her alone?
A: It is possible to ringfence your assets in your Will so that you retain control over who benefits from them after you die. You can do this by setting up a Discretionary Trust. However, this would mean that you would not be leaving your assets to a specific beneficiary, instead you would appoint trustees who would use their discretion to pay out the capital and/or income from the Trust.
It is often the case that people appoint professional trustees who will take a neutral stance on decisions about assets held in the Trust. You can draft a ‘letter of wishes’ for the trustees, specifying whom you wish to benefit from the trust and whom you wish to exclude from benefitting. If your wish is that money passes only to your daughter and there is money still left in the Trust when she dies, the balance would pass to your surviving next of kin, for example your grandchildren, and there would be no inheritance tax to pay.
There are, however, downsides to ringfencing assets in this way, including the administration costs of running the Trust. You should therefore seek more in-depth legal advice about the most suitable way of drafting your Will to achieve your desired outcome, taking into consideration the full circumstances.
This question has been answered by Victoria Wilson, a Partner with GHP Legal. If you would like to speak to someone about this or any other legal matter, please visit our website www.ghplegal.com and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194
