A lot of married couples get mirrored Wills and for many people, they are a sensible choice. That goes for civil partners too, since the law is the same for married couples and civil partners.
However, mirror Wills are not suitable for everyone so it is worth considering the pros and cons.
What is a mirrored Will?
Mirrored Wills refer to each spouse having a Will that mirrors the instructions in the other one.
This typically means that when the first spouse dies, everything passes to the survivor. Since the instruction is the same in both Wills, it doesn’t matter who dies first.
What are the benefits of mirrored Wills?
Spouses and civil partners have the benefit of being exempt from inheritance tax. So when the first spouse dies, there is no inheritance tax to pay provided that everything passes to the surviving spouse.
Mirrored Wills achieve this by passing everything to the surviving spouse and vice versa.
If you have children, this may not happen if you die without a Will (known as intestacy). It depends on the value of your estate. Without a Will, your children could inherit some of your estate and possibly pay inheritance tax.
You can see if this is likely by using the Government’s online intestacy tool. But bear in mind that it’s simply impossible what the value of your estate will be when you die, and whether the tax laws may have changed.
What are the drawbacks of mirrored Wills?
Like other kinds of basic Wills, mirrored Wills pass everything directly the surviving spouse. This means that there is no protection for the assets you’ve passed on.
What happens if the surviving spouse marries again? Their existing Will is immediately null and void.
Even if they don’t remarry, they could rip up their old Will and make a new one that benefits their new partner.
For people in a second marriage with children from a previous relationship, mirrored Wills could lead to your children being disinherited.
Are there any alternatives to mirrored Wills?
If you’re a married couple with no children, basic mirrored Wills could be just fine for your needs.
But if you’re a married couple with children, you might want to add some protection for your assets to ensure that they will inherit something, no matter what happens in future.
For married couples on a second or third marriage who have children from previous relationships, adding protection is highly recommended.
Protection takes the form of a Trust in your Will.
Asset protection takes the form of a Trust in your Will. This could be a Property Protection Trust that gives the surviving spouse the right to live in it until they die, after which your half passes to your children.
Another suitable Trust would be a Flexible Life Interest Trust (FLIT), which gives the surviving spouse the right to income from the entire estate, plus capital if the trustees agree.
What is the best way of protecting my assets?
Having a Trust in your Will does provide some protection, but assets only go into the Trust after you die.
All sorts of things can happen in life, so the ultimate way of protecting assets is to set you a Trust whilst you’re still alive. This kind of Trust is called a lifetime Trust.
Having a lifetime Trust means that the protection is in place straight away. After you die, the trustees of the Trust (typically family members, including your spouse and children) can decide the best time for your children to inherit.
This means that:
- If your children are in the middle of a messy divorce, trustees can delay their inheritance.
- If your children are on means-tested state benefits, trustees can give them their inheritance a little bit at a time, to avoid losing them.
- If your children are high earners, their inheritance can stay in the Trust to help them avoid inheritance tax when they die.
- If your children live abroad, it avoids them having to pay high inheritance tax in another country.
- If a child is vulnerable and cannot look after money, they do not inherit it directly.
Lifetime Trusts are a lot more expensive than Wills, although typically the price includes Wills as well.
How should I go about getting a Will?
If you’re a married couple in Bristol, why not talk to us first? We offer free consultations so we can advise you on the best type of Will or Trust to get.
To find out more about the benefits of getting a Will, download our free guide.
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