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Dawn Sullivan, solicitor at Gabb & Co advises on wills for couples.

THE majority of people in the UK die without making a will and many married couples or civil partners assume that if one of them dies, their assets will automatically pass to the surviving spouse or partner. However, that is not always the case. Automatic inheritance only occurs if the couple hold their assets in joint names.

Married couples can make wills leaving their assets to each other, which would certainly be effective for Inheritance Tax (IHT).

However, there are good reasons for having a simple trust arrangement, protecting assets against nursing home fees, the re-marriage of the surviving spouse or divorce, bankruptcy etc of children/grandchildren.

Therefore, it is wise for married couples to make wills leaving everything on flexible life interest trusts for the benefit of their partner.

This means the surviving partner can continue to live in the family home and will be entitled to receive income from any investments held in trust. The trustees also have the power to make capital payments out of the trust to the survivor if required.

The trust protects the assets so that their capital value would not be taken into account for means testing if the survivor had to go into nursing care.

The trust enjoys the full benefit of spouse exemption for IHT purposes on the first death and, while trust assets may be subject to IHT on the death of the survivor, two full IHT thresholds can then be claimed.

We believe this approach to will-making provides the best solution for most married couples and civil partners.

It combines tax effectiveness with flexibility and simplicity and can easily be adapted to meet unexpected changes in family or financial circumstances.

Gabb & Co's Private Client team is top ranking in the Legal 500 and Chambers Legal Guide, and earlier this year was the only Welsh firm in the top 25 UK firms in the publication Private Client. For more information contact Dawn Sullivan on 01873 852 432 or dawn.sullivan@gabb.co.uk
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Dec 8, 2010
Words:333
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