Two Reflections into One

Two Reflections into One

One of the commonest Wills estate planners are asked to create are simple mirror Wills for couples. These Wills are an effective way of passing your estate directly from one to the other. They are virtually identical Wills where one member of the couple leaves their estate to other in the event of their death. This is often seen as an easy and cost-effective method for couples to have a Will. However, there are implications to this Will that need careful consideration.

Our first concern when creating Wills is to ensure we pass our wealth and possessions to those we love (spouse, children, grandchildren etc) – but what if in doing so we actually deprive them?

For instance, a mirror Will that passes everything direct to your spouse does not account for such scenarios as your spouse needing long term care. Local Authorities will take into account the value of the estate passed to your spouse when determining costs. In April 1993 The Community Care Act came into force, which gives Local Authority the power to use your finances and assets towards the cost of their care. If an individual’s total assets (which includes the value of their home) amount to more than £23,250 (£26,250 in Scotland or £24,000 in Wales), the Local Authority expect them to pay for in full for their care fees. Once their assets have reduced in value to the £23,250 limit, the Local Authority will begin to contribute partly to the cost of their care, but they will be expected to continue paying until their assets are reduced to £14,250. At this point, the Local Authority will take over the payments. If you leave all of your estate to your partner, both your share and their share of the assets will be used for care fees, which depending on the duration of care required could leave very little to be passed to your children and so on.

The second consideration is succession. In the event of your spouse remarrying the original mirror Will is superceded by the marriage, meaning everything could pass to the new partner. By simple passing everything direct to your partner there is no guarantee that your combined estate is passed to your children or grandchildren on their death. The presence of a new partner, children, step children or grandchildren could seriously impact on your own children’s inheritance if left with a mirror Will scenario.

As much as our partners may be the “Mirror staring back at me”, careful thought must go into whether we should make “two reflections into one”. For more advice and personal estate planning contact Langham Wills on 01473 487611 or email theteam@simplewillsonline.co.uk