Ensuring your children do not spend your money recklessly  

When the actor Robin Williams died in 2014, after a hugely successful career he had accumulated considerable wealth. He was concerned about his children receiving this wealth immediately after his death and the affect this might have on them.

Tom Rimmington, Head of Wills & Probate at Peter Edwards Law in Hoylake, explained what Robin Williams and many other people do. “To protect his children he set up a Trust which, in the UK, we would call a Protective Trust. It was set up in such a way that instead of his children receiving a huge lump sum, they would get their money in three stages. One third at 21 years old, one half at 25 and the rest at 30”.

Tom added, “This type of Trust is commonly used in situations like this when the people receiving the money cannot manage their affairs. Perhaps they are too young, they have an illness like a drink or drug addiction or suffered a brain injury”.

Protecting children if your partner remarries

Tom explained further, “A much more common situation I come across is when clients remarry after the death of a partner. One or both may have children and, of course, you want make sure your own children inherit from the estate. A Trust can ensure the new husband or wife and their children don’t get a cut of what your children are entitled to.

“This can be set up so when the husband or wife dies a Trust is set up in the Will ensuring the remaining partner has a life interest in the estate. This means he or she can remain living in the main residence for as long as they wish and receive an income from the rest the estate for the duration of their life. When the remaining partner dies, all your share in the estate will go to the people you want, typically the children from your first marriage or partnership.

Protecting your home if someone needs to go into care

“A Trust can also be useful when a couple wants to take some action to protect their main residence if they went into care in the future. As we all know, your property will be used to pay for care costs if you can’t afford it and it could mean your partner and children are left with very little.

“A Trust can be set up in your Will. On the first death, you give your surviving partner a right to live in the main residence for as long as they wish and on their death your children are entitled to the property outright. Provided you satisfy certain other criteria you are protecting that half share in the home because, in financial terms, it is disregarded as their capital”.

Provided you receive professional advice when setting up a Trust, it is a useful tool for protecting your family in the circumstances outlined above. 

For more information about Trusts, book an appointment or a home visit through tomrimmington@peteredwardslaw.com, vickynealey@peteredwardslaw.com or call 0151 632 6699.

FREE Wills & Powers of Attorney Webinar

Don’t leave it to chance, come and join us on 23 May 2022 at 1pm when Tom Rimmington and Peter Edwards are holding a free online webinar. You can find out more and book your place by visiting www.peteredwardslaw.com.