There’s a saying in the private client team that you never draft the same will twice. Five months into my seat I can confirm that this is true. Every client’s situation is different and therefore so is each will. A will I drafted recently for a client demonstrates how personal drafting a will can be and how fee earners need to think on their feet as unexpected facts can often arise during the process.
Our clients own a chain of family restaurants worth approximately £50 million. They have been married for 35 years and have three children, two of whom are married. Their estate consists of a London property worth £4 million, one buy-to-let property worth £1 million and a property in Italy for which they already have a separate will. We meet with the client to go over their circumstances and explain what we would recommend for their will.
The clients want to be sure that their business stays in the family. Two of their children are married but they would like to be sure that if either of them ever divorces, the ex-spouses wouldn’t take a percentage of the shares. We advise that the business shares would potentially benefit from 100% business property relief because it’s a trading unquoted company and they have owned it for more than two years. We would recommend putting the business assets into a business property relief trust. This preserves the business property relief as on the first death, the entire estate, including the business assets, would pass to the surviving spouse. For inheritance tax purposes, anything in an estate going to a spouse is exempt. Therefore by putting the assets into a trust for the benefit of the spouse and the children, you are making sure that you fully utilise the relief. It is also a more flexible option as beneficiaries can be added to the trust if circumstances change and, in the event that a child is getting a divorce, the assets aren’t legally owned by the children so are greater protected.
The clients then say they have an additional concern that they wish to address. Mr X had an affair about 15 years ago which led to a child born outside of his marriage. The three children do not know about the affair or the child. He pays a monthly maintenance to her but doesn’t have any contact with the child. He wants to know if the child would be able to make a claim on the estate as he doesn’t wish to leave her anything in his will. We advise the clients that any claim would be based on the Inheritance (Provision for Family and Dependants) Act 1975.
Under UK succession law, you are free to leave your estate to whomever you choose. However, some individuals such as spouses or children, or someone who is financially dependent on you, can potentially make a claim on your estate if they are not provided for. The primary question for the clients will be whether our client is English domiciled. That requires a detailed analysis of his family circumstances including that of his parents. We refer our clients to our trusts estates and disputes (TED) department and agree in the meantime to refer to our clients’ three children by name in the will rather than the standard drafting “to all my children”. We also advise Mr X that it would be worth discussing this with his children.
It was really interesting as a trainee to see how my supervisor dealt with such a personal and complicated family situation and showed me how varied each will instruction can be.