It may be more prudent in certain circumstances to leave your spouse or partner a life interest in your assets rather than giving them outright ownership.
In particular this can be advantageous if you want to make sure any children you have receive something in the future.
Married couples often make duplicate Wills, leaving everything to each other and then after both their deaths, to their children.
The problem with this is that after the death of the first parent, unforeseen circumstances could mean that either the Will becomes invalid or the money in the estate is spent before it can be inherited.
For example, if the remaining parent remarries, any previous Will automatically becomes invalid. If the parent fails to make a new Will, their assets will pass under the Rules of Intestacy, with the majority of the estate going to the new spouse, who is then free to leave it elsewhere in their own Will. Even if they intend to honour an intention to pass the money to the children, it may be spent, for example on care home fees.
Similarly, if a new Will is written, any previous Will is superceded. This could mean that after the death of the first parent, the remaining parent is free to leave the whole estate elsewhere and not to the children.
Finally, if the remaining parent moves to a care home, then assets in the estate can be swallowed up in fees. At present the local authority will only step in to assist with payments when the patient’s total worth falls below £23,250.
By leaving someone a life interest, you can be sure that ultimately your assets will pass to those you choose.
For example, you can leave your spouse a life interest in your home, which means they can live there as long as they want, but once they have died, your share will pass in accordance with your Will and cannot be given elsewhere. This process is also neutral for Inheritance Tax.
This also prevents your share being used to pay their care home fees.
Similarly you can leave a life interest in other assets, including cash and shares. This allows your spouse access to money and interest for living expenses, but means that the money remaining after their death will go to your children, or whoever you have chosen.
If you would like to discuss whether leaving a life interest in your Will might be suitable for you, ring one of our expert lawyers on 01276 415835/6/7.