Children First: Avoid Spousal Claims on Inheritance
Want to leave money to your children but don’t wish their spouses to take control? We look at how to avoid spousal claims on inheritance.
The first example is a marriage with the risk of divorce. This could mean any money your child receives as an inheritance will be at risk when a financial settlement is made. The court could decide that their spouse should receive half or even more than half, depending on the circumstances.
Alternatively, inheritance could be at risk in another way. Your child’s spouse is facing bankruptcy or might be investing in a risky business. Protecting your estate so that your child can benefit from it for the rest of their lives, requires consideration when making a Will.
Make sure you leave a Will
Step one is to make sure that you have a Will in place. Without a Will, your estate might not pass to the beneficiaries whom you wish to receive it. Not having a Will means all of your assets pass in accordance with the Rules of Intestacy. These rules set out in strict order of priority who inherits and how much they will receive.
For example, if you are married with children, your spouse inherits the first £270,000 of your estate plus all of your personal possessions. The remainder of your estate is split in half, your spouse receives one half and your children share the remaining half equally. In some situations, this means that your children could receive substantially less than your spouse, which might not be what you want. If your children are married, then any money received is at high risk of being considered a matrimonial asset. This could be considered in a financial settlement, should they divorce in the future.
Consider putting assets in trust
Use your Will to place assets in a discretionary trust to safeguard them for your children. Trustees can use these assets to benefit your children. A letter of wishes can guide how you want these assets used.
However, trust assets aren’t completely divorce-proof. Always seek legal advice to structure your estate effectively. Courts can consider trust assets as financial resources in divorce settlements.
Setting up a trust for your children often protects assets better than outright gifts. Outright gifts are more likely to be included in divorce proceedings.
If you would like to speak to one of our experts call us FREE on 0800 781 6658 or email us at enquiries@estplan.co.uk
Our services help numerous clients and their families to proactively safeguard their wealth and optimise inheritance for cherished beneficiaries. Plan for the future now, ensuring later-life protection and certainty for your loved ones.