Legal firms have seen a rise in “trust clauses” or conditions specifying when an inheritance is paid, as parents and grandparents attempt to control their wealth from beyond the grave.
Experts say soaring property prices, longer lifespans and a rise in second and third marriages are fuelling this trend.
Many conditions are typical such as parents stating an inheritance will only be given if it is spent on property or education, or their children can only access it from a certain age. This is known as a bare trust and is one of the most common clauses.
However, some stipulations are more unusual. There has been a recent will that stated no inheritance would be given to 4 grandchildren until they were baptised. They were in line for around £20,000 each, but some of them are not yet baptised and are not keen on the prospect.
One man even left himself £100,000 should he be reincarnated — although it is unclear how he would prove his identity and claim his money should he return.
A rise in DIY will-writing services has made it easier for people to include more unusual clauses, but solicitors say there is also a growing trend for more traditional conditions, particularly where children are concerned.
Parents often feel concerned about their children being ready to receive a large sum of money and to have the means to manage it sensibly and effectively. Typically, parents who delay their children’s inheritance state they can only have the money when they reach 21 or 25, but this can also stretch to middle-age.
In some cases, the money may only be released if the beneficiaries achieve certain life goals, such as buying a home, setting up a business and getting married. Legacies are also often left for friends and neighbours on the condition they care for pets.
Some clauses are included in wills to protect wealth from “opportunist” spouses. Where the level of wealth being passed on is significant, there is often the clause that if large sums of money are paid to children they should have a pre-nuptial or post-nuptial agreement in place. These documents set out how money will be shared in the event of a divorce.
Straight up exclusions are also very common. One in 10 wills created on freewills.co.uk deliberately leaves someone out — typically estranged children, but also current husbands and wives.
Conditional gifts in wills can only be paid if the beneficiary does what is required. This is legally binding as long as the terms are clear.
A letter of wishes is more informal and simply outlines what the will-writer would like their loved ones to spend the money on. Fulfilling the wishes of the will-writer falls on the chosen executors or trustees. If the conditions are not met within the stated time frame the money goes into what’s known as the ‘residue’ of the estate.
Usually in the will there is a residue clause which names someone who will inherit ‘everything else’ after gifts, debts, funeral expenses and inheritance tax is paid.
The executors must hold on to the money until the conditions are met. If there is no time limit, the beneficiaries of the residue could come forward and fight for the money they believe they are due.
We can come to you, in the privacy and convenience of your own home, to discuss Wills, Trusts and Lasting Powers of Attorney. We will explain why they are important and suggest ways that you can put steps in place to give you peace of mind for the future.
By drafting a Will, Lasting Powers of Attorney or setting up Trusts, not only will your wishes be carried out as you would like but you can also protect your family and friends from costly and stressful legal disputes.
Please contact us on 01724 642 842 or by email on info@tytolaw.co.uk to discuss Wills, Trusts, LPAs or any of our services.