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One of the most important and often emotional decisions you will face when writing or updating your Will is how best to leave cash sums to those you care about.
While it may seem straightforward, there are several things you need to consider ensuring you are leaving exactly how much you want, who benefits and parameters in place to avoid any potential disputes.
It requires serious thinking and planning. There is more to it than just leaving a certain amount to a beneficiary, you need to consider when they should receive their inheritance and the potentially utilising trusts to protect their inheritance.
Your Will is a powerful tool. It will clarify important aspects of your estate including gifting cash to family members, friends and charities.
There are a few different ways you can choose to pass on money in your Will. You need to work out what is best for you and your beneficiaries.
Most individuals will make cash sums a gift and declare who the beneficiary of that is. This is usually a family member, a friend or a monetary gift for charity.
In addition to this, you can decide a beneficiary will inherit the cash sum when they get to a certain age. This means your beneficiary will receive their inheritance upon reaching the age stated in your Will.
It is worth considering this option if you feel your beneficiaries are not an age where they can handle a significant sum of cash and could waste their inheritance.
For children under the age of 18, you will need to place that cash sum into a trust. The trust will protect the cash sum, and your children will be able to access their inheritance once they turn 18.
If you choose to place cash sums in a trust, you will need to appoint trustees to manage and distribute assets once they reach 18. The trustees can also decide to release the cash early if they feel it’s beneficial.
You may also choose to leave a beneficiary a share in your Residuary Estate as opposed to a set figure. This may include cash assets depending on what your estate is made up of.
There are different trusts available so it’s important to choose the right one and consider the potential tax implications.
A discretionary trust allows your chosen trustees to manage the money and decide how and when it should be used for the benefit of your loved ones. The beauty of a discretionary trust is that it provides a level of protection.
The money is not automatically owned by the beneficiary, which means it can’t be claimed in a divorce settlement or used to pay off debts if they are bankrupt.
It’s important to think about your situation and those of your beneficiaries before deciding to create a trust. The trust will protect the cash sum you leave but with that comes potential tax implications which could affect its value.
If you are in the process of writing or updating your Will and have any doubts about leaving cash sums, it’s important you speak with legal experts who can advise and support.
Your Will clarifies what you want to happen and there are multiple ways to leave cash sums in your Will. Legal experts can offer you sound, tailored advice to support your needs and those of your beneficiaries.
They can explain your options, help you choose the right one and ensure your estate and Will is how you want it to be.
Looking to write or update your Will? Get in touch with our team.
Head of Wills, Probate and Older Client Services
I joined Mander Hadley’s Wills, Probate and Older Client Services Team in 2018.I specialise in the preparation of Wills, Probate and estate administration, trusts and trust administration and Lasting Powers of Attorney. I also have experience of care fee planning and appeals of Continuing Health Care decisions.
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