The 5 Threats (FEB 2020)

Care Costs: Following first death, should the surviving spouse/partner need Care then the whole estate including the family home would be assessed to pay for the cost of that Care. Divorce: If your children/chosen Beneficiaries are subject to divorce proceedings, then half of what you intended them to receive is at risk to Divorce settlements.

Inheritance Tax (IHT): Inheritance Tax would be payable on any amount in excess of the couple’s Nil Rate Bands (NRB). Creditors or Bankruptcy: If the surviving spouse were to be subject to Creditor Claims/Bankruptcy then the inherited estate is fully at risk. Similarly, if any of your Beneficiaries are subject to Creditor Claims/Bankruptcy then the inherited estate is fully at risk. 

Generational IHT: On second death the remaining estate is likely to be directed by the Will to the Beneficiaries. This then adds to the Beneficiaries’ estates and could impact their own Inheritance Tax. Marriage After Death: On first death all the assets are then solely owned by the surviving spouse. What if the surviving spouse re-marries? The inherited estate could be lost to the new spouse disinheriting your children.