The term ‘Grandparent Will’ is becoming more widely used these days but how do you go about protecting your grandchildren’s inheritance with a grandparent Will exactly? What is it and what are the advantages of it? Lucy Duffin, from Penderlaw Solicitors explains…

A Grandparent Will is what we would term a Flexible Will. Many couples draw up Wills leaving everything they own to each other and then to their children, commonly known as Fixed Mirror Wills or Rigid Wills. In making these types of Wills, they of course assume that their family will receive all their hard-earned assets when they pass away. However, sadly this is not always the case.

Inheritance diminished by care home fees
For example, if your partner needs to go into a care home following your death and your Will leaves all to your partner, the Local Authority could potentially make a claim on your joint assets to pay for the care, rather than just the half of the assets belonging to the survivor. This could deprive your family of the inheritance you worked so hard to give to them. It would also lump all the assets to a partner who does not require them whilst in care, but who cannot make lifetime disposals to the next generation, who may be in greater need. With a Flexible (Grandparent) Will, you and your partner can each leave half of the home you share to your children in Trust. The Trust states that descendants are only to receive the deceased’s share in the property following the death of the surviving spouse. This means that at least a share in the value of your home could be protected, but that it can still be sold or re-mortgaged during the lifetime of your surviving partner, should they need to.

Missing out on inheritance because of re-marriage
Should you leave everything to your partner absolutely upon your death (not in Trust), and they re-marry, their Will would be revoked automatically. They could also make a new Will at any time directing assets away from your bloodline or chosen beneficiaries. If their new partner has children of their own, things can get even more complicated. This is often quite a shock to people who are not necessarily aware that re-marriage will revoke any existing Wills. A Flexible (Grandparent) Will would again protect at least half of you and your partner’s joint assets, by making lifetime provisions from the Trust for your surviving partner but guarantees the ultimate benefit to be taken by your children or the beneficiaries named in your Will, rather than just to whoever dies last.

Difficulties which can arise with Fixed or Rigid Wills include:
• Fixed Wills are less expensive but can quickly go out of date
• When they go out of date, they can produce wrong, or inconvenient outcomes, which require more work and fees to rectify during the administration
• They can create profound (sometimes unintentional) unfairness between beneficiaries
• They cannot keep up with changes in tax and local authority legislation
• They give no opportunity for tax planning
• If your beneficiaries are not in a position to receive a fixed legacy on the death of both you and your spouse, say because of bankruptcy or divorce, your Estate has no means of avoiding this
• It is less cost effective to keep a Fixed Will up to date, because a new Will may be required each time your situation changes, unlike a Flexible (Grandparent) Will
• When you have a Fixed Will, you are less inclined to change it and therefore it is more likely to go out of date
• Your beneficiaries are less likely to consider or seek advice on tax planning opportunities after your death
• Fixed Wills often lump assets to the surviving spouse who may not need them all and can become subject to financial assessment for care fees and other care packages; and
• In the event of a challenge or dispute by a beneficiary, your Executors have no room for manoeuvre, to prevent expensive litigation

\The adaptability provided by a Flexible (Grandparent) Will means that they can respond to the various uncertainties which must be taken into account when making a Will, such as:

• You do not know when you will die
• You do not know which of you (you, or your spouse) will die first
• You do not know the size of and nature of your Estate, when you die
• You do not know your circumstances, whether you will be living at home, or in a care home when you die
• You do not know the circumstances of your beneficiaries when you die
• You do not know what tax legislation and local authority rules will be in place when you die
• Wills still give one of the best opportunities remaining for tax planning
• It gives you the opportunity to keep up with events as you grow older, without having to keep changing your Will
• You can set out your instructions and wishes in plain English, in a document called a Letter of Wishes that everyone can understand, rather than the more technical language that is contained in the formal Will. Your Letter of Wishes will be stored with your Flexible (Grandparent) Will
• You can keep your instructions up to date via your Letter of Wishes, without the need to constantly redo your Will. This is much more cost effective and time efficient
• The instructions you give can take account of lifetime gifts and loans to beneficiaries to produce equality
• A Flexible (Grandparent)Will can deal more effectively with a dispute within the family after you die

Take advice
In order for these Wills to work effectively, there may be other action to undertake, such as ensuring that you jointly own your property in a manner which means your share is dealt with by your Will, and not just by an automatic right of survivorship. It is therefore important to take professional advice when considering the preparation of Flexible Wills. Our experienced solicitors are able to provide holistic Estate planning advice, identify all action required depending on your individual circumstances, and also prevent any potential conflicts between your lifetime planning and Will planning. If you are going to be proactive in this area, it must be done properly!

Get in touch
If you would like to talk to us about making a Flexible (Grandparent) Will to protect your family’s inheritance, just contact our friendly team on 01872 241408 or email info@penderlaw.co.uk