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The family dynamic is becoming increasingly more complicated and therefore the need to protect succession interests in these family structures is becoming extremely important. Most commonly, the issues arise in the context of second marriages where children from those previous marriages are concerned and where spouses are concerned about care home fees in the future.

The life interest trust Will is an extremely useful vehicle for ensuring that you can protect an element of your estate so that it always reaches its intended beneficiary. Most clients will create the trust with the intention of benefitting the surviving spouse (including civil partners and even perhaps cohabitants) for the rest of their lives with the trust asset then going to their intended beneficiary, such as the children or charity. The surviving spouse will be entitled to remain in the property or replacement property (such as if they downsize) for the remainder of their lives or until such triggering event occurs which terminates the trust arises, thus providing protection to them.

The benefit that many clients relish is that the portion of the estate that is placed into the life interest trust is effectively ringfenced and the life tenant does not own the property, they are merely benefitting from it which means that it will not be included in care home fee assessments. There are not many restrictions as to what assets can comprise the trust, but you would want income producing assets – we find that many clients place their half share of the property into the trust but you may also place cash assets in as well. The income that the trust produces, such as dividends from investments or rental income is paid to the life tenant. This type of trust is recommended where there are children from previous marriages on the scene because it allows for you to guarantee that your children will ultimately benefit without risk of being omitted from the surviving spouse’s Will if they were to remarry, for instance. Essentially, the trust assets do not belong to the survivor, but the Trust, and so they cannot be redirected by the survivor’s Will.

Another benefit is that the trust is inheritance tax neutral. Placing the assets into the trust upon death for the benefit of your spouse (or civil partner) will be treated as though it was an absolute gift and therefore exempt from inheritance tax in the same way as a direct gift in your will. It is important to remember, however, that it is not a direct gift and the survivor does not physically own the assets.

If you would like some guidance on navigating the labyrinth of Wills please do not hesitate to contact Alex Strickland on alexs@kjcoxsolicitors.co.uk

Mutual Wills are Wills made by two people with the intention that neither person will alter the terms of the Will and nor will they revoke the Will for the rest of their lives without the consent of the other person. Therefore, a mutual Will remains binding on the surviving person after the first death. If the surviving person does change the Will after the death, the executors of the original Will would hold the estate on a “constructive trust” – that is, a legal remedy rooted in promoting fairness where someone has been wronged. If the Court were to hold that a constructive trust is present, the executors would hold the estate for the benefit of the original beneficiaries who have been wronged by the revocation of the Will contrary to the original agreement.  

Mutual Wills contrast with Mirror Wills which are the more conventional approach with regard to couples looking to make a Will. Those who intend to create a mirror will do so under the same terms but without restrictions imposed upon them. With a conventional mirror will, there is no way to ensure that the surviving spouse will not change their Will after the death of the first spouse. In many family situations this is fine because they may, perhaps, both share the same children. However, in many family dynamics, this does create a concern – perhaps where they have children from a previous marriage they wish to protect – and this is where the idea of a mutual will begins to take hold.

Disadvantages of mutual Wills

Mutual Wills naturally lack flexibility and can infringe on our testamentary freedom. There is a long history of testamentary freedom in England & Wales and the mutual Will can, some would argue, strike at the heart of that. As solicitors, we often say to our clients that we do not have a crystal ball and therefore cannot see the future: families and relationships change dramatically over time, and a mutual Will is not accommodating of this.

Additionally, in the event that there is a long period of time between the death of the first testator and the surviving spouse, they may have decided to remarry, have a new family and change their Will. The reality is that a remarriage would revoke an existing Will, and this would certainly have legal effect. The equitable remedy, however, is that the constructive trust would take effect should the original beneficiaries make a claim.

It is incredibly important that anyone making such a Will does so of their own free will and free from any outside pressure.

Recent case law:

In 2023, the Court made judgment in Naidoo v Barton. It was held that the test for undue influence in the creation of mutual Wills relies only test for Contract Law (the Etridge test), rather than the stricter probate test. It therefore means that a mutual will is a contract of sorts between the two people. The Etridge test recognises two forms of conduct: (1) acts such as threats and coercion; (2) exploitation of a relationship in which someone has influence over the other – such as abusing power under a Lasting Power of Attorney. In the case of (2), where it can be proved that a person was in a state of vulnerability or is dependent, it will create a shift in the burden of proof: it will create a rebuttable presumption of undue influence.

In contrast undue influence in a probate matter is never presumed and instead it must be established that there was coercion.

Alternatives: the life interest

As an alternative the couple making a Will could place certain assets into a trust. The basic principle of this kind of trust is that the surviving spouse would have an entitlement to the income (if any) that the assets produce, and the benefit of using the assets (such as property) for the remainder of their lives but they would never be (unless a clause in the trust document permitted) entitled to the underlying capital. This ensures that the surviving spouse is protected and so are your ultimate beneficiaries whilst still permitting the surviving spouse testamentary freedom over the rest of their free estate.

If you would like some guidance on navigating the labyrinth of Wills please do not hesitate to contact Alex Strickland on alexs@kjcoxsolicitor.co.uk

Alex had a great time at The Petersfield School giving a presentation on the different pathways available to become a qualified Solicitor. It was lovely for him to be invited back to his old school.

Thank you to TPS for the invite.

Our FREE presentation is to find out more about Lasting Powers of Attorney with the opportunity to ask any questions.

Presentation took place at:

Brendoncare Alton, Adams Way, Alton GU34 2UU

Brendoncare Alton provides residential, nursing, dementia, end of life and respite care for 80 people.

For more information visit: https://www.brendoncare.org.uk/

Lovely to be back at our dementia friendly clinic today. We are here on the first Friday of every month between 11 and 1 to answer any legal queries.

The dementia friendly clinic is organised by Dementia Friendly Alton.

Dementia-friendly Alton is a Queen’s Award winning charity that was formed in July 2014. The charity’s primary objective is to facilitate partnerships with community groups, businesses, and stakeholders in Alton to promote a dementia-friendly community that provides vital support to people living with dementia in Alton and the surrounding area. The charity runs various activities for people with dementia and their carers, including coffee mornings, dance classes, craft sessions, picnics, and walks.

For more information please visit www.dementia-friendly-alton.org.uk

Our new Alton office is now open and looking great! We are officially ready to welcome clients. Please pop in and say Hello!

You will find us at:

7 Turk Street, Alton, Hants, GU34 1AG

Great day at the Sundial SEND event. Thanks to Louise, Bradley and Kate for flying the KJ Cox flag.

On Sunday 2nd July the sun shone down on as the Coins Foundation celebrated their biggest event ever, welcoming over 1,400 guests for their Sundial Festival 2023.

There was plenty to keep the younger guests occupied, including a climbing wall, laser quest, assault course, bouncy castle, swimming, garden games, pole joust, soft play, tennis, fishing, face painting and a photo booth. In addition to this they had a musical session by Suzie Songtime, inclusive fitness with Stefan and Pathways Education ran arts and crafts throughout the day.

Another lovely afternoon at the Dementia Friendly Alton event today. Thanks for having us! 

We had a lovely afternoon talking to the Year 8 students about possible careers in law. Thank you Oakmoor School for having us.

The KJ Cox team were privileged to support this wonderful event, the Sundial Festival. Supporting families of children with additional needs.

A truly lovely and heart warming day.

We love helping our community on matters that are passionate to us.