Wills and Succession Planning

• Making a Will ensures that you benefit those you wish and to the extent that you wish. If you die without a Will the law prescribes who inherits your estate and the shares that each takes.
• You can choose your executors - those who are to be responsible for dealing with your assets after your death and carrying out the wishes expressed in your Will – and guardians for your children.
• You can make the most of any tax saving opportunities for example by making sure you use rather than waste your Inheritance Tax allowance (including making sure you can use your “residence nil-rate band” if applicable - an extra allowance that will apply in certain circumstances if you leave a residence to your children).
• Certain assets for example certain business and agricultural assets are taxed at a reduced rate or escape Inheritance Tax altogether. Such assets can be passed to beneficiaries gifts to whom would otherwise be taxable e.g. children or grandchildren. Leaving such assets to the next generation rather than to your spouse ensures maximum advantage is taken of these reliefs.
• You can secure a greater degree of protection and control of your assets on your death by including carefully drafted trust provisions in your Will. This is particularly useful e.g. if you have children from a previous marriage or you have complicated family circumstances.
• If you are a UK national with assets in Europe you can make an election in your Will for English law, as the law of your nationality, to govern succession to those assets under the European Succession Regulation (often known as “Brussels IV”). Read more about Brussels IV
• If you are a non-UK national with assets in the UK it can often be beneficial to make an English Will dealing with those assets. Find out more
• If you have married since making your Will it will have been automatically revoked on your marriage.

Your Will does not necessarily cover all the property that you own. Some assets pass in accordance with rules particular to them. We can advise you on succession to assets not covered by your Will to ensure that this is tax efficient and consistent with your overall wishes for your estate.

Joint Property

Property in England owned jointly is held either as “Tenants in Common” or as “Joint Tenants”.

Joint owners who hold their property as Tenants in Common may each dispose of his or her share by Will.

Joint owners who hold as Joint Tenants however may not. On the death of a co-owner his or her share automatically passes to the other (or others) regardless of any provision made in a Will.

We can review your joint ownership arrangements with you and check that they are as you wish. If it is appropriate to change from one type of joint ownership to the other this can be done simply and quickly.

Trusts

Although you may be entitled to receive the income from a trust, or to occupy trust property it will be the trust deed and not your Will which determines who inherits the trust assets on your death. The trust deed might allow you to specify in your Will who is to inherit the trust assets, but that is less common.

We can review the terms of the trust when advising you in connection with your Will and advise you if there is any action you can take which could benefit your estate.

You might also be thinking about setting up a trust in your lifetime and we are well placed to advise you on the options available. Find out more about our trusts expertise, both in the UK and offshore.

Life Assurance

In the absence of other arrangements benefits will be payable to your Executors. The same is true of other similar death benefits, for example in connection with a pension or death in service benefit.

Convenient as this might seem, it is also unnecessarily expensive: the proceeds will be liable to inheritance tax notwithstanding that they were received only after your death. Furthermore your executors will not receive the money until after a grant of probate to your Will has been proved (a process which typically takes 3 months or more).

You can avoid both consequences by writing the life assurance policy or death benefit in trust. Those controlling the trust (the trustees) can be and often are the same people as your Executors. They will receive the money immediately, tax free, and could use it straight away to help tide over beneficiaries until money is available to them from your estate or even to cover some of the expenses of administering the estate, for example Inheritance tax.

It is important that any trust is set up correctly particularly where the death benefit attaches to a pension. We can advise you as necessary and comment on or prepare the necessary documents.

Pensions

The rules governing pensions are increasingly complex and we work with a number of professionals who are specialists in this area. We will be happy to recommend specialist advisors or work with your existing advisers to ensure your pension arrangements are consistent with your overall estate planning.

Foreign Assets

A UK Will does not necessarily cover assets outside the UK.

The issue of foreign assets is complicated and often will require advice from a lawyer in the country where the asset is situated. It may be necessary or preferable to have a foreign Will to dispose of such assets. We have experience working with lawyers in other jurisdictions and will liaise with your foreign lawyer to ensure that your UK Will operates effectively and in concert with any existing foreign Wills.

Do you need an English Will?

If you are domiciled outside the UK it may still be appropriate for you to have an English Will.

Domicile is an English Law term meaning, very broadly, “your true home”. It is possible to be resident in the UK and domiciled outside the UK. For example you have come here to work (for say 5 years) after which you intend to return to the US.

Domicile is an important factor in succession to your assets. It is usually the law of the place of your domicile which governs succession to your estate. An important exception to this general rule is that immovable property (most usually land and buildings) passes according to the law where the property is situated. Find out more about domicile

If you own your home or other immovable property in England having an English Will disposing of that property can be a great help to your heirs: it is quicker and simpler to use an English Will than to wait for a foreign Will first to be proved or verified in another country and then proved here.

There may also be advantages to having an English Will to deal with other assets in the UK, for example investments run through a UK investment manager, or cash deposits held at a UK bank. It is then vital to consider the succession law of your country of domicile and any restrictions that law may impose.

If you have more than one Will, for example one dealing with your assets in the UK and one with your assets anywhere else in the world, it is important to check that the two work properly together, and one does not revoke the other.

This does not affect your domicile for inheritance tax purposes which is determined by specific tax rules.

Our experience in this area includes:

• Advising on succession and preparing Wills for a husband and wife, he domiciled in one jurisdiction she in a second, and both resident in a third and owning assets in two further jurisdictions, advising on issues of international succession law and inheritance taxes in the various jurisdictions
• Advising entrepreneurs on tax efficient Wills and other structures to maximise the availability of inheritance tax business property reliefs on death
• Advising the family on the splitting of a £100m family investment company between two branches; and one of the new companies on subsequent amendments to its constitution particularly having regard to pre-emption rights to preserve continued family ownership
• Advising a married couple domiciled in an Islamic country on Wills and succession planning in relation to their assets in England, USA, France and the Islamic country
• Advising an ultra high net worth client on his Will and tax and estate planning. The client wanted a substantial portion of his wealth to be used to create a private charitable foundation on his death and the work involved creating that foundation
• Advising entrepreneurs on tax efficient Wills and other structures to maximise the availability of inheritance tax business property relief on death
• Advising the owners of a business on the transfer of shareholder protection insurance to trust for surviving shareholders and ensuring adequate provisions included within the shareholder’s agreement to secure inheritance tax business property relief
• Advising couples on appropriate structures for Wills and estate planning on second marriages and where there are children from a previous relationship
• Advising individuals who are either about to marry or are in the process of divorcing on the most appropriate structure for Wills so as to protect beneficiaries and avoid claims against their estates
• Advising a UK resident Italian domiciliary married to a UK resident and domiciled spouse on succession to valuable assets in Italy and the UK. After taking Italian advice we prepared two Wills both governed by UK law each creating trusts one for the Italian assets and the other for the UK assets

Do any of the following apply to you?

• You haven’t made a Will.
• You have married since you made your Will.
• You have had a significant change in your personal or financial circumstances since you made your Will.
• You have made a Will and you are not sure if it applies to your foreign assets.
• You have made a foreign Will and you are not sure if it revokes your English Will.
• You are non-UK domiciled and are not sure if you should make an English Will.
• You are non-UK domiciled and you are not sure how inheritance tax will apply to your estate on your death.
• You are UK domiciled but your spouse is not and you are not sure how inheritance tax will apply to your respective estates.
• You have business or agricultural property assets and you are not sure if your estate could benefit from inheritance tax relief on these assets.
• You are not sure if all your assets are covered by your Will.

If yes, then we recommend that you seek professional advice about your Will and succession planning.