The story of Colin Bywater was recently reported in the Telegraph and contains a stark warning to make no assumptions when preparing your Wills and Inheritance Tax planning.
Colin was widowed by his wife, 20 years his junior and the sole owner of the marital home. As the marital home had been subject to a mortgage, it could not immediately pass to Colin on his wife’s death without payment of the £230,000 outstanding mortgage.
83-year-old Colin was not easily able to raise the equity needed to stay in the home, which he had in fact built. In addition to struggling to raise the funds, he also had the difficulty of negotiating with his late wife’s Executors where he had not been appointed himself.
Colin was eventually able to secure an equity release agreement which would discharge the mortgage in his wife’s name and allow him to continue to reside in the property. However, this was not before a period of significant distress and unease at an already difficult time.
There are undoubtedly additional factors to consider when preparing your Will in the event of a second marriage. Very often there are competing interests in the form of your current spouse and your children from previous relationships. By investing in a carefully considered and properly drafted Will you can ensure that everyone’s interests are protected and minimise the risk of issues arising after one of you passes away.
Even where a second marriage is not involved, it is important to ensure that your Will is appropriate and designed to be suitable in a range of different circumstances including where assets are held unevenly, or where one party might be significantly older or younger than another.
In addition, since the introduction of the Residential Nil Rate Band, we work to ensure that our clients maximise their Inheritance Tax relief and pay as little Inheritance Tax as possible.
If you have any questions in respect of your existing Will or would like to put a new Will in place, please contact a member of our Wills and Probate Team.