Mr B approached Labrums to help him find a way for his children to benefit from his mother’s legacy as they had not been mentioned in her will.
Situation and Challenges
Mr B’s mother had passed away just under two years before he contacted Labrums. Mr B was seeking advice on how his children could benefit from his mother’s legacy as they were not beneficiaries in her will. He wanted to retain control of the legacy while having the flexibility to be able to pass money on to his children at his discretion. Mr B was also concerned about the Inheritance Tax consequences if he were to gift his children money from the legacy.
Approach and Methods
It is important to keep in mind that after a death there is a two year legal deadline in which wills can be varied. Mr B contacted us within the two year window to seek support in drafting the legal documentation needed to make a variation to his late mothers will, which would allow him to benefit his children. The biggest challenge our team faced was that there were only four weeks remaining before the two year deadline in which to complete all necessary arrangements. Even within this tight timeframe, our dedicated team of expert solicitors knew from experience exactly how to approach this case to find the best outcome for Mr B. By creating a family trust, we would be able to vary the will to divert the legacy into this trust. A family trust would allow Mr B to remain in control of his mother’s legacy but would also allow him to decide when his children could have access to the money, as well as how much they would receive. As Mr B would remain in control, he would still be able to use the legacy money himself, if he wished. Mr B also had concerns about Inheritance Tax and one of the main benefits of a family trust is a reduction of Inheritance Tax liabilities.
We drafted the necessary legal documents to make the variation to his mother’s will, diverting the legacy directly into the newly created family trust. Mr B’s concerns about Inheritance Tax were also resolved. By varying his mother’s will with retrospective Inheritance Tax effect, and by using a family trust rather than gifting any of the legacy, the money was not subject to further Inheritance Tax obligations due to the fact it remained under the £325,000 limit. Labrums worked closely with Mr B within a tight timeframe to ensure solutions were found for all his concerns. He remained in control of his family legacy but now with the added flexibility to benefit his children when and how he wished. Our team ensured every process was completed before the two year window closed and, in the end, all final documentation was signed with only 3 days to spare!
I’m proud of what the team achieved to deliver what the client wanted within the timeframe we had.
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