A recent article in the Sunday Times highlighted some of the very real problems that can arise over inheritances and family wealth as the number of “blended” families rises. 

If you enter a second relationship or have children from multiple relationships, then issues can arise as to how to benefit everyone on your death.  This is even more of an issue where you have stepchildren involved or co-habiting couples.  It is not often appreciated that re-marrying will invalidate a previous will, which can lead to unforeseen problems and potentially expensive litigation at a later date. 

Not doing anything to address these problems, and relying on things to be sorted out after your death, is not really a solution, as the statutory intestacy rules that apply when someone dies without leaving a will can be arbitrary and will not necessarily take into account different family circumstances. For example, an unmarried partner or a stepchild who has not been adopted cannot benefit under the intestacy rules.

With this in mind, the key to ensuring that your wishes are followed and that the people you wish to inherit do eventually benefit, is to ensure that you have a properly drafted will drawn up and that it is kept under regular review.  Proper planning is the key to ensuring that wider family circumstances can be taken into account and a way of benefiting everyone found. 

Colman Coyle has considerable experience in advising in relation to lifetime succession planning and the preparation of wills. If you would like to discuss the issues raised here, please contact Patrick Green on +44 (0)207 354 3000 or Patrick.green@colmancoyle.com.

Patrick Green

Senior Associate

There has been considerable publicity recently regarding the very real difficulties many families are having in accessing child trust funds, where the child turns 18 but is unable to make decisions for themselves. 

Once a child turns 18, legally they become an adult and have the responsibility to make their own decisions.  As a consequence, no one else has the right to make decisions for them.  This includes parents. 

The Office of the Public Guardian has now issued an information pack to help parents and carers make financial decisions for young people.  Often the only option is for an application to be made to the Court of Protection for a parent or other family member to be appointed as a deputy so as to manage the young person’s finances on a long-term basis. However, the process of applying for a deputyship can take a long time and involved legal and Court fees.

Colman Coyle has considerable experience in advising in relation to these issues, preparation of powers of attorney and Court of Protection applications. If you would like to discuss the issues raised here, please contact Patrick Green on +44 (0)207 354 3000 or Patrick.green@colmancoyle.com.

Patrick Green

Senior Associate

The Chancellor unveiled his budget on 15th March but from the point of view of inheritance tax and estate planning there was no new announcements.

It had been announced in the 2022 Autumn Statement that the inheritance tax thresholds would remain at their current levels until April 2028 and so this gives some clarity as to the position over the next few years.

On that basis it is worth summarising some key points.

For a married couple or those in a civil partnership, they have inheritance tax allowances of up to £1,000,000 between them available on death.  With this in mind, it would be important to ensure that your wills are up to date so as to maximise the use of these allowances.  This is particularly the case where one member of the couple had a previous marriage or civil partnership that ended on death.  If that is the case, there is the possibility of bringing in the deceased’s allowances too and so if this may be relevant to you, it would be important to take advice.

There are still steps that can be taken during someone’s lifetime to mitigate a potential inheritance tax liability.  Gifts can be made during someone’s lifetime to take into account their annual inheritance tax exemption.  Another exemption that tends to get overlooked is gifts out of surplus income, whereby, an individual can make a gift for inheritance tax purposes of any amount from their surplus income, but it is important to take advice on making this type of gift to ensure that it is recorded properly.

Various other lifetime exemptions are also available, including gifts in consideration of marriage or civil partnership, which again is an exemption which is often overlooked.  You can make a gift to either or both parties to the marriage/civil partnership which is exempt from inheritance tax, with the actual amount that is exempt depending on your relationship to the couple.

Again, it would be sensible to take advice on this and it should be noted that these exemptions can all be combined with each other so that relatively significant tax savings can be made over the course of time if gifts are properly planned.

Colman Coyle has considerable experience in advising in relation to lifetime tax planning and the preparation of wills and related issues and if you would like to discuss the issues raised here, please contact Patrick Green on 0044 0207 354 3000 or Patrick.green@colmancoyle.com.

Patrick Green

Senior Associate