Shall I Buy a Hat?
Heather Lally, Associate Solicitor and Estate and Trust Practitioner at Bowcock Cuerden LLP discusses how estate planning advice can lead to marriage.
Romance is in the air each February as Valentine’s day approaches. It is unfortunate that so many weddings and civil partnerships have been postponed due to Covid restrictions. However, it is still worth planning for your special day, even when reviewing or having your Will prepared.
Heather Lally advises clients on Wills in contemplation of marriage which means that even if they do marry in the future their Wills won’t be revoked by the marriage itself, which would be the case if a certain clause is not included.
Heather often sees clients that have been in a relationship for many years without tying the knot. Perhaps it is a fear that something may change in that relationship. Something certainly would in terms of estate planning. A marriage or civil partnership can result in your beneficiaries receiving more of your estate, as inheritance tax can be reduced on the death of the surviving spouse or civil partner.
How this works is that each individual has a Nil Rate Band allowance of currently £325,000 for inheritance tax purposes. When assets are left to a spouse or civil partner on first death, there is a spousal exemption meaning that no inheritance tax is paid. This exemption is not available to unmarried couples. Therefore depending on the value of the estate, inheritance tax may be payable on first death for unmarried couples.
The estate of a surviving spouse or civil partner can claim the unused Nil Rate Band of the first spouse to die along with any unused Residential Nil Rate Band (currently up to £175,000 for an individual if your residence passes to direct descendants). This in practice means that for spouses or civil partners with direct descendants and a residence in their estate, up to a further £500,000 of allowances can be claimed by the survivor’s estate. That can result in a saving of inheritance tax of up to £200,000!
Naturally therefore in advising clients the conversation often arises and Heather finds herself asking clients, “Shall I buy a hat?”. Heather is always pleased when she receives an email, telephone call or is informed on the next meeting that clients have decided to get married, perhaps her advice has some part in her clients’ decisions? you can decide for yourself. Not quite in the same league as the legendary late Cilla Black in match making but the question arises none the less.
Bowcock Cuerden LLP have an experienced team of Solicitors who can assist in your Will preparation, along with preparation of pre-nuptial agreements.
For more information on Wills, estate administration, Trusts, Powers of Attorney or Court of Protection matters, please contact Heather Lally on 01270 611106 or email hlally@bowcockcuerden.co.uk
This article is not intended to be comprehensive or to provide specific legal advice. It should not be relied upon in the absence of specific advice given in relation to particular circumstances.
