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Steps you can take to protect your family's assets

Protecting your Assets - and Pitfalls that can Deprive your Family of their Inheritance

Bloodline Planning – Keeping Assets in the Family

And how a £90.00 will deprived a daughter of her inheritance.

Many parents, after a lifetime of hard work, feel that it is very important that the assets they have built up should be protected and kept within the family to benefit their children, grandchildren and future generations.

With proper planning, this is easily achievable. However, it is vitally important to take proper, professional advice, to make sure that the will is properly structured, and all necessary accompanying formalities, which might not be immediately obvious, are observed. Otherwise there is a risk that the intentions stated in the will are not carried out.  

An Example of A Costly Estate Planning Mistake – Failure to make a Deed of Severance.

Ebenezer Aregbesola died in early 2014, having made a will in which he left his half-share of his matrimonial home to his daughter Tinuola. He owned the house jointly with his second wife, who was Tinuola’s stepmother.

Ebenezer had used a cheap and cheerful will-writing service to draw up the will, and advice from a skilled and experienced professional had not been taken.

Consequently, he was not advised that it was essential that the ownership of his house be registered in a particular way.

Ebenezer and his wife were registered as co-owning their house as “joint tenants”. This meant that, when Ebenezer died, ownership of the house automatically passed exclusively to his wife by “Right of Survivorship”. Consequently, Ebenezer’s half of the house did not pass through his estate, and could not be passed by his will. So his wish to give his half of the house to Tinuola could not be put into effect.

If Ebenezer had received the right legal advice, he would have known that, along with his will, he needed to draw up a Deed of Severance, converting the co-ownership of the house to a “Tenancy in Common”. If Ebenezer had been a tenant in common, his share of the house would have been eligible to pass as stipulated in his will, and Tinuola would not have been deprived of her inheritance.

How else can family assets come under threat?

There are many ways in which children and grandchildren can be deprived of their inheritance by accident.

Failure to make a will at all can often have very unhappy consequences. If you are married to your children’s step-parent, for example, you may not realise that, without a will, under intestacy rules, it will be that step-parent who takes priority after your death, leaving your children with little or nothing.

If you and your spouse leave everything to each other, expecting everything to pass smoothly to the survivor of you, and then on to your children, this can be a mistake. If you die first and your spouse later remarries, their mirror will becomes invalid as soon as the second marriage takes place, so that intestacy rules kick in, favouring the second spouse over your children.

Care home costs can erode your family’s assets considerably, but there are steps you can take,  which will at least preserve your half of the family home if you pass away first and your spouse later goes into care.

Even if assets do manage to pass safely to your children, the pitfalls continue. Difficult life problems such as divorce, debts or addiction problems can all cause their inheritance to go up in smoke.

So, how can assets be protected for the family?

The key to keeping assets in the family across the generations is to put in place the right kind of estate plan.

A proper estate plan includes a will that is constructed with your family’s needs in mind, and which considers, and deals with, what might happen decades into the future.

Depending on your circumstances, the right will for you may include the use of Trusts, which are very effective at drawing a protective veil around your assets for the benefit of the people you care about.

If you jointly own your home, ensuring that you and your other half are registered as tenants in common is always a very wise step.

The most important thing to do, however, is to seek professional advice. Make sure that you discuss all your financial and family circumstances as fully and frankly as possible, and make sure you talk openly about what you want to achieve.  That way, all the necessary information is available so that exactly the right estate plan can be constructed for you.

If you have any questions about keeping your assets in your family, feel free to fill in the contact form below – or to call us on 0151 601 5399 – we’re happy to share our knowledge with you.

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