A Standard Will
This important document allows you to:
- appoint the Executors to your estate
- determine who your beneficiaries are to be
- allow you to appoint Guardians for your orphaned minor children
- appoint trustees to manage your children’s inheritance until they reach an age where they are mature enough to take responsibility for it themselves
- specific gifts and legacies to friends, loved ones or charity
- plan and state your funeral requirements
A Mirror Will
This type of Will allows you to do the things stated above in a standard Will but is more appropriate for a couple either married, in a civil partnership or living together who wish to write exactly the same Scottish Wills appointing each other as executors and beneficiaries of each other’s estates i.e. mirroring each other’s wishes.
Property or Family Protection Trust Will
The NHS Community Care Act 1990 came into force on the 1st April 1993. This Act stated that anyone who has to go into Long term Care and has assets above £24,750 will have to pay for these costs themselves. These assets include your home and the Act allows your Local Authority to force you to sell your home to pay for these costs, The capital from the sale proceeds will then be used and gradually depleted to pay for these costs.
Typically care home costs are anything between £30,000 and £50,000 per year, depending on where you stay, so you can see how quickly these costs will eat into the inheritance you wanted to leave for your loved ones.
Why work all your life to see the fruits of that labour being taken away from your family by the government when individuals who do not have these assets will get their care for free anyhow!
The Property or Family Trust Will can also be used to protect your children’s inheritance from what is known as “sideways disinheritance”. This is where the surviving spouse or partner remarries and predeceases their new partner, leaving their estate to their new family and effectively disinheriting their own children.
The use of a Protective Property or a Family Protection Trust will prevent these actions.
Discretionary Will Trust
This type of Trust will often be used to care for a minor or vulnerable adult, who may have physical disabilities or learning difficulties. A Discretionary Trust is often used to arrange for financial benefits to be made available to support and assist a relative or loved one in such a situation. They are also often used to provide a way to own property for a vulnerable individual typically in relation to long term care, to live at home or to have a degree of independence. Therefore a Discretionary Trust can be used for:
- managing money or other assets for an individual’s benefit
- as a vehicle to own, manage and maintain property
- as a way to arrange an inheritance
- to provide for items that are not within the scope and provision of the Local Authority or social services such as a holiday, additional clothing, transport or even for additional care
- as a way to avoid care costs and funding being paid and to avoid any other benefits being stopped or reduced. These include benefits such as Income Support or Housing benefit which will cease to be paid if an individual is above a certain financial or monetary threshold
Accumulation & Maintenance Trust
This type of Trust is particularly useful in allowing your chosen Guardians to financially provide for your minor children in the event of your death. The Trustees that you have nominated will provide the Guardians you have also nominated with the relevant funds to provide for their financial well-being until they reach the age of 18 when they will inherit the estate. Additionally, there is provision for your children to inherit at a later age to a maximum age of 25. Please note that is there may be additional taxes on the trust fund subject to the value of the Trust fund if your child is not disabled.
Life Rent Trust
In many instances will want to make sure that your partner or spouse is adequately provided for on your death however also wish for, typically, your children for a previous partner or marriage to also be adequately provided for. This can be catered for by giving your current spouse or partner a “Life Interest” from income from your capital or from being able to stay within the family home. This will restrict the inheritance to the income or interest earned on your capital or other asset. This will also allow your partner to live in your house rent-free for the rest of their life or for a specified period until they remarry or cohabit with a new partner. Upon their death or the end of the specified event or period the assets and property will revert to the children and they then receive their inheritance.
E.g. “A” makes a Will which gives his wife “B” an interest in his house for her lifetime on his death, but on her death it has to pass to “C” absolutely. This means that she can continue to live in the house, for her lifetime and treat it as her own, but she does not own it. “C” actually owns the house but will not have a vested interest until “B” dies. In this example, because “B” does not own the house she cannot give it to anyone in her Will. “A” has already stipulated in their Will where the property is to go on “B’s” death.
Inheritance Tax Planning Will
Death and Taxes go hand in hand so it is vital that in the event of your estate being valued over the current Inheritance Tax Threshold (currently £325,000 per individual, £650,000 per couple for 2013/14 tax year) and you wish to avoid paying anything over this threshold at a rate of 40% on the balance to the government, then a tax-efficient Scottish Will to mitigate having to pay such an unnecessary and avoidable tax is necessary. I am sure you agree that you pay the Government enough of your hard earned money throughout your lifetime and do not want them to take it at the expense of your children and loved ones upon your death.
Many people wrongly assume that they have little or no assets to leave as an inheritance however you’re home and other properties, cars, life insurance policies, current and frozen pensions and company benefits such as death in service benefits mean that you may have a lot more of an estate to leave to your loved ones than you think.
To receive qualified and ethical advice in relation to any aspect of your Scottish Will-Writing and Estate Planning requirements, please visit our contact page.