You make a Will leaving everything to your husband or wife.
They make a Will leaving everything to you.
When the second person dies, everything will go to the children.
Simple.
And in many families, that is exactly what eventually happens.
But there is a potential weakness in this arrangement that many couples have never considered.
It is commonly described as sideways disinheritance.
Put simply, assets you expected eventually to reach your children can move sideways into another family.
At Your Will Writers in Codsall, this is an issue I regularly discuss with couples when considering whether straightforward Wills provide enough protection.
How Can Sideways Disinheritance Happen?
Consider a fictional couple, Robert and Anne.
They have two children.
Their Wills say:
Robert leaves everything to Anne.
Anne leaves everything to Robert.
After the second death, the children inherit equally.
Robert dies first.
Anne therefore inherits everything.
At this point, Robert’s original Will has done its job.
The assets now belong to Anne.
What Happens If Anne Remarries?
Several years later, Anne meets somebody else.
Let’s call him Michael.
They marry.
Anne’s estate-planning position may now change considerably.
Marriage itself can have important consequences for an existing Will unless that Will was specifically prepared in contemplation of the marriage.
Anne may make a new Will.
Perhaps she leaves everything to Michael.
That might seem perfectly reasonable to her at the time.
Then Anne Dies
Michael inherits the estate.
Remember, this may include wealth originally built up by both Anne and Robert.
Michael now owns those assets.
Later, Michael dies.
His Will leaves his estate to his own children.
Robert and Anne’s children may receive nothing from those assets.
The inheritance has effectively moved sideways into another family.
Does the Survivor Have to Remarry for This to Happen?
No.
Remarriage is simply one example.
Once assets have passed outright to the survivor, they generally have control over what happens to them.
They could potentially:
- Change their Will
- Give assets away
- Leave money to a new partner
- Become estranged from a child
- Favour one child over another
- Experience financial difficulties
- Spend substantially more than expected
Circumstances can change dramatically over ten or twenty years.
“But I Trust My Husband or Wife”
This isn’t necessarily about distrust.
Most couples who consider Property Protection Trusts trust each other completely.
The issue is future circumstances.
Neither of you knows what life will look like after the first death.
People change.
Families change.
Relationships change.
A trust can provide a degree of certainty that does not rely entirely on future circumstances remaining as they are today.
How Can a Property Protection Trust Help?
For homeowners, one option is to include a Property Protection Trust within the Wills.
Instead of the first person’s share of the property passing outright to the survivor, that share can pass into trust.
The survivor can normally continue living in the home under the trust provisions.
Eventually, the protected share can pass to the first person’s chosen beneficiaries.
That might be the children.
An Example
Assume Robert and Anne own their home equally.
Robert dies.
Instead of his 50% passing outright to Anne, his share passes into the Property Protection Trust created by his Will.
Anne retains her own 50%.
She continues living in the property under the trust arrangements.
If Anne later remarries, Robert’s protected share has not simply become part of the new spouse’s estate.
Subject to the trust terms, Robert’s share can ultimately pass to the beneficiaries he selected.
Does This Prevent the Survivor Using the House?
The intention is normally to provide security for the survivor.
A properly structured arrangement may allow them to remain living in the property.
Depending upon the terms, there may also be flexibility if they later want to move or downsize.
Protection should not mean unnecessarily trapping somebody in a particular house.
Why Property Ownership Matters
A Will trust cannot simply override every form of property ownership.
Couples considering this type of planning often need to hold their beneficial shares as tenants in common.
This means each person owns a distinct share.
That share can potentially pass according to their Will.
Under a beneficial joint tenancy, the deceased person’s interest would normally pass automatically to the surviving joint owner.
This is why the Will and property ownership need to work together.
Blended Families Face Greater Risks
Sideways disinheritance is particularly relevant to blended families.
Perhaps:
- You have children from a previous marriage
- Your partner has children from theirs
- You have children together as well
A simple “everything to each other” Will can leave children from the first person to die especially dependent upon decisions made by the survivor later.
That may not provide the certainty you want.
What If Your Spouse Changes Their Will?
Once assets belong outright to your surviving spouse, you generally cannot control their future Will from beyond the grave simply because you originally contributed to those assets.
That is the key point.
If maintaining control over your share matters to you, the structure needs to be considered before the first death.
Is This Just About the House?
No.
Property is often the main focus because it may be the couple’s largest asset.
However, wider trust planning can potentially involve other assets depending upon the circumstances.
Different trusts have different legal and tax consequences, so this is not an area for a one-size-fits-all approach.
What About Care Fees?
Property Protection Trusts are frequently discussed alongside care fees.
If the first spouse’s share has legitimately passed into a Will trust after their death, it does not simply belong outright to the surviving spouse.
That can be relevant later.
However, these arrangements should not be marketed as guaranteed care-fee avoidance.
Local authorities can consider deliberate deprivation of assets, and care-funding rules are complex.
For many couples, protecting against sideways disinheritance is actually a clearer reason for considering this type of trust.
Do You Need a Property Protection Trust?
Not necessarily.
Some couples are perfectly comfortable leaving everything outright to each other.
Their circumstances may be simple.
They may have no concerns about remarriage or different beneficiaries.
Estate planning should not make Wills more complicated without good reason.
But you should understand the choice you are making.
Questions Couples Should Ask
Sit down together and consider:
If I die first, do I want my spouse to own everything outright?
Do I want to guarantee as far as reasonably possible that my share eventually reaches my children?
Do either of us have children from previous relationships?
How would I feel if my spouse remarried?
How is our home currently owned?
Would a trust provide useful protection?
These can be uncomfortable questions.
But they are valuable ones.
Property Protection Planning in Codsall
Your Will Writers is based in Codsall and helps couples throughout Wolverhampton and South Staffordshire review their Wills and property protection arrangements.
This includes clients from Tettenhall, Perton, Wombourne and Brewood.
I can look at your current arrangements and explain the options in straightforward language.
The aim isn’t to sell everybody a trust.
It is to make sure you understand what happens after the first death and whether that outcome matches what you actually want.
Your Will Should Look Beyond the First Death
This is perhaps the biggest lesson.
When couples make Wills, they naturally concentrate on what happens when the first person dies.
But good estate planning should also ask:
What happens next?
What happens five years later?
Ten years later?
What if the survivor remarries?
What if family relationships change?
What if the survivor makes another Will?
If preserving an inheritance for your children matters to you, those questions deserve answers.
Because leaving everything to your spouse may protect them perfectly after your death.
But without further planning, it doesn’t necessarily guarantee where those assets eventually end up.
This article provides general information only and should not be treated as individual legal, financial or tax advice.