Five threats to your estate after you are gone

The five main threats to your estate, a summary

There are five main threats to your estate on death; reasons that your assets may be lost and not go fully to who you want them to.

Each threat in more detail:

Marriage after death

There is a risk your children or grandchildren may lose out.

If you die and your spouse remarries there is a very real threat that your children and grandchildren could lose out if your spouse then dies before his or her new spouse. The new spouse, having inherited your assets via your spouse then may rewrite his or her Will to give your children or grandchildren nothing! This threat can be prevented with suitable estate planning.

Long term care fees.

Protect your house from having to be sold to pay for long term care fees.

If you need to move into a long term care home, the local authority may force you to sell your property to pay for the care home fees. Steps can be taken now to protect your property; for your family to retain control over it.

Generational Inheritance Tax (“IHT”)

This means IHT can be paid on your asset’s multiple times

When you die your estate may be subject to Inheritance Tax (“IHT”). If you gift your assets absolutely, they then become part of the beneficiaries’ estates. If this pushes them over the IHT threshold, further IHT may become payable on the assets you originally passed down. This can reoccur through generations, with more of the estate being gradually eroded by IHT and the tax man.

Templar Estate Planning can advise how the use of trust can reduce or eliminate the risk of generational IHT.

Divorce of beneficiaries

An ex-spouse of a child or grandchild could take some of your estate

Templar Estate Planning’s video explains how, if you gift your assets absolutely on death, a subsequent divorce amongst your children or grandchildren could result in a portion of your estate being taken by the ex-spouse as part of a divorce settlement. This is because you have given your assets absolutely so it forms part of the assets that the judge will share out on divorce

We can explain how the use of trusts can protect your assets more, to ensure that they cannot be taken by ex-spouses on divorce and retained within your family, for ongoing benefit of your children or grandchildren.

Creditors and bankruptcy

If you gift your assets absolutely on death they become property of the beneficiaries. They can then be taken or attacked from creditors on bankruptcy or IVAs. Templar Estate Planning can advise you how the use of trusts can protect your assets from such threats.