Author: Helena Luckhurst
This article is taken from Helena Luckhurst’s blog The Wealth Lawyer UK
Second marriage spouses sometimes have Wills that do not leave their assets to their second spouse outright. This is particularly the case when there are children from the first marriage and the intention is to ensure that everyone – the second wife and the children from the first marriage – receive something. For some clients, this can be a hard balancing trick to get right but careless will drafting can make the situation a lot worse.
Let’s take the example of a husband (H2) and wife (W2), both of whom have been married before and both have children from their first marriages – H2 dies first. If H2 leaves assets to W2 outright, W2’s Will can leave H2’s assets in line with W2’s own wishes on death, disinheriting H2’s children in the process. You may think that all your clients know that one by now but those stories of horrified children inheriting none of their father’s assets after their step-mother’s death that keep appearing in the press from time to time suggests not.
The solution tends to involve one of two options involving will trusts: H2’s Will either gives W2 a life interest in some or all of the assets or, if it is just a matter of controlling how the home devolves and perhaps H2 and W2 own their home jointly as tenants in common, W2 is given a right to occupy the home.
There are three key bear traps to watch out for in these arrangements:
Either of these two outcomes can break what can be a fragile harmony between the two sets of families.
The moral of these tales of woe is, if you have clients who are on their second or later marriage, please check their Wills and, if they contain a trust for the second spouse, be very clear about where the IHT burden will fall. Do not assume that the will drafter has thought about it!
Helena Luckhurst, Partner, Fladgate LLP (firstname.lastname@example.org)