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James Rousell - Partner

In light of a recent newspaper adverts, we have received several queries about the setting up of so called  “bloodline protection wills” or “bloodline trusts”.  

Bloodline planning  is generally about  protecting the inheritance of your loved ones  - in short - trying to ensure that your assets reach your children, grandchildren and other relatives, rather than ending up in the wrong hands!  For example, proper bloodline planning, could protect your assets for your children (and descendants ) by specifically minimising the risks of  re-marriage of a surviving spouse or Civil partner, divorce, creditors, tax and the exposure to future nursing care costs.

Many married couples, civil partners and/or unmarried couples often set up relatively simple mirror Wills whereby, on the first death, they leave everything to each other. On the second death, the assets would then typically pass on to their children or chosen beneficiaries. In many cases, this may be entirely appropriate.

However, if say, a married couple leave everything to each other on the first death, this means that the surviving spouse would be the absolute and outright owner of the whole estate. This could include the family home but also cash, shares and investments etc.

This can give rise to various potential risks and these are just some points you may wish to consider:

1.       What if a surviving spouse was to remarry? How would this affect your own children if he/she later changed their will in favour of the new spouse and any subsequent children? Would your children potentially miss out on their inheritance?

2.       What if the surviving spouse needed nursing or residential care in the future? This could, in some cases, expose the estate to exorbitantly high long term care costs – thereby reducing the value of your children’s or chosen beneficiary’s inheritance.

3.       What if a surviving spouse (or even your children) was to experience financial difficulties and be at risk of bankruptcy in the future? This could again reduce the value of your estate significantly.

4.       What if you have children who have complex care needs, who may lack the capacity to manage their own finances or who are in receipt of state, means tested benefits? How do you ensure they are properly provided for?

The risks set out above can be alleviated by the correct use of bloodline Wills or even lifetime Trusts. Bloodline planning can offer a degree of protection and this can extend to the protection of the family home, cash assets, investment products and even family businesses.

Bloodline planning involves the use of Trusts that will be incorporated as part of your Will although in some cases, the use of a lifetime Trust may be appropriate. The purpose of these Trusts is to safeguard your assets ultimately for your children and/or descendants but, at the same time, providing financial security and protection for your surviving spouse, civil partner or partner (as the case may be).

Everybody`s circumstances are different and there is certainly no “one size fits all”. If you are concerned about the risks set out above, you should take professional and independent advice.

If you would like any further information or advice, please contact James Rousell on 01384 371622 or email j.rousell@wjclaw.co.uk