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06 Dec 19
Keeping Your Estate Inheritance in the Bloodline
These ‘What ifs’ can affect families and prevent your wishes from being respected or even cause your heirs to lose their share of the estate inheritance entirely. One of the factors that could stop your loved ones receiving their inheritance is called Sideways Disinheritance.
Sideways disinheritance can affect thousands of families and can mean that assets that are left as a part of the estate inheritance and meant for children or other beneficiaries, are diverted away from their loved one. This can be due to one of many possible life events. It is likely that these events will affect most families at some point.
We’ve compiled a list of frequently asked questions on the potential loss of estate inheritance:-
What happens to the estate inheritance if you or your spouse remarries after becoming widowed?
Should a surviving spouse remarry then any assets that were jointly owned or inherited by the survivor would typically be shared with their new partner. This would mean that any estate inheritance intended for the beneficiaries from the original married couple would, therefore, be diluted. Also, if the new partner has his or her own children and outlives the original spouse, the original beneficiaries can be disinherited completely.
What happens to an estate inheritance if a beneficiary were to become divorced?
Should a beneficiary divorce then any assets left to them as part of the estate inheritance, via a Will are most likely to become part of the financial settlement. In fact, even if you are still living, the share of the estate inheritance that a beneficiary is due to receive in the future can be taken into account during a divorce financial settlement and handed over when it is received.
What if a beneficiary suffered financial hardship?
If you leave assets to a beneficiary and they are suffering from, or have suffered financial difficulty then their creditors could seize part of or all of their share of the estate inheritance.
Estate inheritance using Trusts
If you use a Trust as part of your Legacy Planning, then there are many benefits provided by a Trust that a simple Will alone cannot provide when it comes to bequeathing your estate. Preventing Sideways Disinheritance is one of these benefits, protecting your beneficiaries and ensuring that estate inheritance remains solely with your heirs for generations to come, therefore keeping it in the bloodline. A Trust is like having a safety deposit box with your estate inheritance in it. The only people who can take anything out of it are those who have the keys. They create an alternative way for a family or a group of people to own assets. This should remove the risk of those assets being exposed to an individual’s personal liabilities as described in this article.
Another benefit of bequeathing your estate via a Trust that a simple Will alone would not provide is that:
When someone dies their estate will have to pass through probate. This means that your beneficiaries (children/grandchildren) will not be able to access your estate until probate is completed. For many families this causes additional financial difficulties at what is already a difficult time. How would your beneficiaries be able to pay these fees and charges? How can they sell your home?
Did you know that assets that are a part of the estate inheritance (financial and property) held in a trust at your death are instantly available to your beneficiaries the day after you are no longer here? This means that your beneficiaries will be able to use your funds to pay any bills, inheritance tax and to sell your home quickly and easily making a difficult time a little more easy.
True Bearing has a dedicated Legal Services team; Brian, Diane and Mark. Between them they have a wealth of knowledge on Legacy Planning and Trusts. If you feel you would like to speak to one of them, please call 01257 260011 or visit our Legacy Planning and Trusts page for more information.
Source: The information for this article was provided by the Legal Services Guild.
Please note that the Trust’s described here are not designed to mitigate Inheritance Tax Liabilities.