Dominic Browning, Managing Director
Posted by Dom Browning
News, Resources, Insight and Opinion from Browning Financial Planning

Sideways Disinheritance

Dominic Browning, Managing Director
Posted by Dom Browning

People often worry about their children losing their inheritance due to the costs of care fees. However, whilst this does happen in some cases, the real killer is “sideways disinheritance”. What is this, you may ask?

It is a fact of life that when you die, your widow/widower may find happiness again in later life. This often leads to re-marriage. At this point, the new couple either forget to re-do their Will (the old one is invalidated on marriage) or they write Wills agreeing to leave everything to each and then on second death, split the estate between all the children on both sides of the family.

The problem is that when one of them dies, the survivor gets everything and is under no obligation to honour the wishes of their second spouse and simply changes their Will to leave everything to their own children. This is sideways disinheritance and it is VERY common.

So how do you protect against it?

You draw up a Will that includes a discretionary trust and is set up on first death. Then when you die, your share of the estate (typically 50%) goes into trust and is effectively protected for your spouse BUT ALSO FOR YOUR CHILDREN. If the above scenario occurs and the second family inherit everything, they would need to repay your trust first and thus enable your children to get back 50% of the original estate, rather than nothing.

We set up trust-based Wills on a regular basis.

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