If you’ve considered writing a will, it’s probably to make sure your assets pass to your children. A simple will might say something like “I leave everything to my spouse, but if he predeceases me, divide my assets equally among my children.” Job done well?

Although technically speaking, the answer is yes, the reality is full of dangers and the inheritance you wanted your children to have can be diluted or even disappear in various ways. Here are four scenarios that illustrate how this can happen.

Let’s say you have two children, Jenny and Peter, who each receive 50% of your estate:

Scenario 1

Jenny gets divorced. Now, half of the inheritance left to Jenny is likely to go to her ex-husband as part of the divorce settlement.

scenario 2

Peter runs his own successful business, but when the market changes, Peter’s business hits a snag and his company is liquidated. The entire inheritance left to Peter is now at risk from his creditors and likely to be taken as part of the bankruptcy process.

Scenario 3

Peter and Jenny are doing very well financially and are both approaching the inheritance tax threshold with the accumulation of their own assets.

Each would love to use the inheritance they receive from you to provide something special for their own children. If something happens to Jenny or Peter after they receive their inheritance, but before they have time to do anything for their grandchildren, 40% of their inheritance is now lost to inheritance tax.

Scenario 4

He dies and is survived by his spouse, who later remarried. His spouse does not update his will, then dies and (through intestate law) leaves all of his joint property to the new wife/husband by default. Your children now inherit nothing.

All of these scenarios can be planned and provisions made so that Jenny’s ex-husband doesn’t take money when they divorce, Peter’s estate is protected from bankruptcy, his grandchildren are protected from paying inheritance tax on his legacy, and his children get less of your share of your inheritance if your spouse remarries.

conclusion

Unfortunately, all four of these scenarios happen every day in the UK. Make sure it doesn’t happen to your family. Get the right kind of will.