Creating a Will is an important step to take, but it doesn't necessarily guarantee your wishes will always be followed. This is because there are multiple external factors that can have a significant impact on how your estate is distributed.
From family dynamics to financial threats, let’s look at some outside forces that could undermine your carefully crafted will.
Threshold Cut-Offs
One of the biggest hurdles that could derail your plans is inheritance tax. The £325,000 threshold for tax-free estates can quickly be surpassed, leaving your beneficiaries to deal with the additional tax burden.
If your estate exceeds this threshold, a hefty tax charge could eat away at the wealth you're leaving behind, but this can be avoided or reduced with careful planning and strategies such as trusts that protect your estate from outside threats.
Spousal Exceptions
The assumption is usually that your spouse will automatically inherit everything and eventually your children, but this is not always the case. A common misconception is that your surviving spouse will receive your estate without any issues, but if they remarry after your death then your assets might end up with the new partner, not your children.
This potential issue highlights the importance of structuring your estate with more flexibility, ensuring your wealth is preserved for the right beneficiaries.
Divorce Of Beneficiaries
Divorce settlements often claim a large portion of assets, including inheritance. Even if your Will specifies certain heirs, an ex-spouse might still have a claim to your wealth, drastically altering your intentions.
A Trust can offer protection by keeping your estate out of the grasp of a former partner’s legal claims.
Predatory Marriage
Remarriage isn't always just about love, it can also be about money. In the unfortunate case of a predatory marriage, which is a growing concern in modern times, a new spouse might siphon off your assets which could diminish the inheritance for your children or other family members.
However, if your estate is in a Trust, then it is shielded from such claims, safeguarding your legacy for future generations.
Bankruptcy And Care Fees
A loved one’s financial troubles or the prospect of care fees can also threaten your estate. If a beneficiary is bankrupt, creditors could potentially claim part of their inheritance. Similarly, long-term care fees could swallow up what you've left for them.
Again, a Trust is a simple measure which can shield assets, ensuring your beneficiaries get what you intended, despite any financial challenges they are facing.
Protecting Your Legacy
Your Will is an important part of ensuring your legacy lives on, but it is not invincible. Outside threats like inheritance tax, divorce, remarriage, bankruptcy or care fees can all interfere with your plans.
With the right planning, you can protect your estate and ensure your wishes are honoured, regardless of these outside threats. We hope the information in this article has helped you - however, it does not constitute financial advice. If you want to learn more about how to protect your legacy from outside threats, get in touch with Integritas Financial Planners today.
Image Source: Canva
