Married couples - individual wills need a joint approach
Jim Sawer, a partner in our private client team, writes in The FT, answering a question from someone who is about to get married for the second time, who has three grown-up children and a house. They want to leave everything to their children, even if their new husband continues to live in the house until his death or remarriage.
In the question: "Should I sign a pre-nup before my second marriage? I'm due to marry my second husband next year but want to protect my assets," Jim speaks about the importance for someone in this position of writing a new will.
If you make the will before you marry, you must make sure it's expressed to be 'in contemplation'' of that marriage so it's not automatically revoked when you marry.
You might sensibly leave the house in trust for your new husband where he is permitted to live in the house for the rest of his life (or until he remarries, cohabits or moves out) whereupon it passes to your children - and that while he lives there, he's responsible for insurance and outgoings. It is quite an efficient arrangement from the perspective of both capital gains tax and inheritance tax.
You might sensibly write your life policy 'in trust' now, coupled with a letter of wishes where you would expect the proceeds to be used to discharge the mortgage and for the balance to be divided equally among the children. Because the policy would already belong to the trustees you appoint (your children themselves, perhaps), the proceeds would not only be outside your estate for IHT purposes, but the proceeds can be obtained by the trustees immediately on your death rather than having to wait for probate.
Death is a certainty and you should plan accordingly. Divorce is, I hope, unlikely. But should you divorce, hopefully your first divorce will have shown you how the courts would endeavour to be fair to you both. Any fear of losing everything is almost certainly misplaced. The fact that the house was your own asset before the marriage, rather than the product of your joint finances, would be a very material factor in working out a financial settlement."
Jim also mentions how if the new husband felt he was not getting a fair share of the estate, he could seek a court order for 'reasonable financial provision' under the Inheritance (Provision for the Family and Dependants) Act, 1975.
You can read Jim's full answer in The FT here.
Jim Sawer is a partner in our private client team. He has a broad private client practice and has advised families in the UK and overseas, including those with commercial and landed interests, for over 30 years. Clients appreciate his ability to identify the true crux of a matter promptly and his results-orientated approach to resolving private client issues in the family context.
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