Last week, MP Gavin Barwell (Minister of State for Housing & Planning) urged people to skip a generation and pass on their estates to grandchildren. He claimed that doing so would help young people get a leg-up on the housing ladder.
Clearly for those in a fortunate enough position to consider his suggestion, his comments make sense - although I am not sure it's a long-term strategy for the affordability of home ownership. However, his comments have sparked debate in the media and his comments were used loosely as the subject of a phone-in on BBC Radio 5Live on whether or nor your kids should expect an inheritance.
Skip to 16 minutes and 10 seconds in this audio clip and you will hear 'Boycie' who plans to spend every penny that he has worked for, before he dies. His kids have been told that they won't get anything and must pay for their own children. What if he dies before he spends it all? Any surplus will go to his 'good lady'.
All of this is perfectly reasonable stuff. Spend your money, enjoy yourself and then when you die, leave it to your wife. Simple! But what if that's just not how things pan out?
We don't get any more detail on Boycie's estate planning to-date - but even with his straightforward plan, he needs to make a Will.
What does Boycie need to consider?
If Boycie's premonition is correct and he predeceases his wife, then if his estate is worth over £250,000 - his 'good lady' won't receive everything that was his and his children will be in line for 50% of anything that remains after the first £250,000. If he put's a Will in place, then he can make sure that she gets everything.
What would Boycie want to happen if his wife died before him? Ensuring that you spend 'every penny' before you die isn't the easiest task. There is likely to be something left over when he dies, where would he want that to go? Children, grandchildren, a friend or a charity? By making a Will he could make the decision - without making a Will, it will go to his children.
Once the basics are out of the way, Boycie might want to consider a number of other scenarios:
If he died and his wife changed her Will or remarried, would he be happy with someone else's children inheriting?
If he's not keen on is children inheriting, I expect he's even less keen on paying inheritance tax? With the introduction of the Main Residence Nil-Rate band in April 2017, his estate could benefit from an additional £200,000 nil-rate inheritance tax band if the family home is inherited by his children or grandchildren. If it's relevant, would he want to make use of that?
Inheritance (Provision for Family and Dependants) Act 1975 permitting, you should be able to leave your estate to whoever you like - but it's really important to understand the implications of the decisions you've made. Too often people have very specific wishes and by either a) not making a Will or b) by creating a Will that does not cover all eventualities, those wishes might not be carried out.
If you have any questions or if you'd like to discuss your options making a Will, please email firstname.lastname@example.org or call 01904 500805.