A common mistake with wills could end up costing you a fortune, according to legal experts. So-called ‘mirror wills’, the most common type of legal document, usually don’t offer protection against the remarriage of a surviving spouse.
They also don’t cover a son-in-law or daughter-in-law separating and then remarrying, leaving the possibility that an estate could be left to non-blood relatives. To avoid this, wealthy individuals have traditionally used legal trusts to protect their wealth and keep their estates within the family.
But it’s not always understood that this type of bloodline planning is also available to any individuals or couples regardless of the size of the estate, even if it’s just the family home.
Paul King, from April King Legal, said: “If you have a mirror will that leaves everything to your husband or wife, or civil partner, and they remarry after your death or go into long-term care then there could be a problem.
“That’s because either the new partner or the local authority is likely to inherit most, if not all, of your assets ahead of your children.
“Even if your children are named in the mirror will, it’s by no means certain they will inherit anything under a mirror will.
“This is because a remarriage would cancel the will you previously made with your deceased partner and the new legal partner then becomes their legal next of kin, ahead of your own children.”
The loophole has caught out millions of Brits and is something Mr King says could happen to anyone without proper planning.
Mr King said: “This often comes as a big shock to people who have gone to the trouble of making a will and thought that all was in order for the family bloodline to inherit the fruits of their labour.
“It is particularly upsetting when you consider the future financial wellbeing of grandchildren.
“For example, if any of your children should die after inheriting from you and leave everything to their husband, wife or civil partner, and that son-in-law or daughter-in-law should then remarry, your grandchildren could be the ones to lose out under the line of inheritance.
“In fact, someone else’s grandchildren may receive the benefit of all your years of hard work.”
It is thought that the vast majority of wills drawn up each year in the UK are mirror wills.
Their premise is straightforward - in the case of the death of one partner, all wealth and property goes to the surviving partner. When they die it then passes onto the children.
Another problem with this type of will is they can be changed or updated at any stage without the other person knowing.
This even applies after the death of one party, leaving opportunity for family fallouts and inheritance disputes.
Mr King said: “While mirror wills may suit some couples, I’d advise them to consider drawing up a ‘bloodline’ will instead.
“These include a legal ring-fence around children’s inheritance so that they remain in complete control and can do as they wish with the money.
“Any tax considerations with these types of bloodline will trusts can be mitigated against through careful planning.
“Bloodline planning in wills can also give them added protection from challenging life events such as divorce, remarriage or creditors. You don’t need to be royalty to consider using bloodline trusts in your will.”
