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The Law Society - Conveyancing

27

Oct

2014

Regularly Reviewing your Will – Nil Rate Band Trusts

We are consistently asked by clients for advice on updating Wills, particularly those which pre-date 9th October 2007 and contain now potentially obsolete Nil Rate Band Trusts.  These Trusts were, quite properly, put in place by solicitors seeking to capture the available Nil Rate Band Allowance of the first spouse (which definition now formally includes civil partners in the context of a Will) to die rather than lose this benefit if the estate was transferred to tax-free beneficiaries such as spouse or charities.

Since this date, changes in the law have allowed the transfer of the available Nil Rate Band Allowance to a surviving spouse, subject to certain rules and requirements.  These changes often make the original Trust obsolete, unless a Will maker – testator- specifically wishes to provide a trust vehicle to benefit a wider class of potential beneficiaries than simply leaving all to their surviving spouse.

If, however, the testator wishes to ensure that their surviving spouse receives the benefit of their entire estate, a new Will removing this trust vehicle is vastly preferable to the cost and administration of dismantling the NRB trust on the first death.  In addition to the cost saving, we would always advise clients to review their Wills every 4/5 years to ensure that they keep pace not only with the relevant law, but also with changes to family circumstances.

This is simply one example of a more technical, legal issue which is often overlooked when a client decides not to review or update their Will.  Equally, your Will should reflect your up-to-date personal, family and financial circumstances:

  • Should those chosen to act as Executors remain in role?
  • Are the same Guardians still appropriate for your children?
  • Would you be happy for one of a couple selected as Guardians to care for your children on their own if their partner were to predecease you or divorce them prior to their appointment?
  • Do you now have grandchildren or other family members whom you would wish to benefit?
  • Does your Will reflect a gift to your new spouse or partner, yet omit children from that relationship, meaning that they would not benefit from their parent’s estate if you were to inherit first and then pass this on through your own Will?
  • Have you considered the need for an ultimate beneficiary should you and your immediate family die together?

We would be more than happy to provide you with advice on your existing or planned Will, or any other estate planning issues.

 

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