I received a call from a concerned family who, after viewing my website, asked me to visit their home with a view to arranging Wills for them.
The family were married with two children but one of the children would be unable to look after their own finances due to disability. The parents were very concerned about this situation as they had no arrangements in place. The husband was also a business owner and due to its considerable value was concerned about inheritance tax. Should the husband die first it's their intention that the business would pass to his wife but she would sell the business shortly after.
The clients have three main concerns
1.To ensure all assets pass to the surviving spouse on first death and then equally between the children.
2.To ensure their vulnerable son's share is protected.
3.To reduce the Inheritance Tax Liability where possible.
Following a detailed discussion, we arranged new Wills that passed all the assets to the surviving spouse on first death. However when the second spouse dies we arranged half of the assets to go to one son directly but the remaining half would be transferred to a Vulnerable Persons Trust for their second son.
The Vulnerable Persons Trust ensures that the son would not be disadvantaged by losing any state benefits that he might be entitled to but also allowing the parents to appoint trustworthy trustees to look after the money for him.
The shares in the husband's business would pass into a business trust which captures "Business Property Relief" at the time of death and if the business is then later sold the proceeds will be in the trust and ring fenced from Inheritance tax in the future.The beneficiaries of the trust would be the surviving spouse and family.
The clients were pleased to have Wills in place protecting their son and potentially reducing their Inheritance tax liability considerably.They were delighted that what they thought was quite a complicated situation was made relatively straightforward.