Will: home and part of estate into life trust for wife, husband or partner; other part into trust for other beneficiaries
This will template allows you to split your estate so that a proportion helps support someone (such as an unmarried partner or brother or sister) for the rest of his or her life and the remainder gives other beneficiaries (such as your children) income or capital value from your estate earlier. The main aim of the will is to separate ownership of your estate from beneficial interest (for example, to ensure children from earlier relationships are not disinherited without disadvantaging a dependant), although it is possible that it could be used to minimise inheritance tax liabilities as well. The will creates two trusts for a life beneficiary, placing your share of the house in one, and a proportion of the estate in the other. It also creates a third containing the rest of the estate for other beneficiaries. Once the life beneficiary dies (or other conditions are met) the trusts are distributed to these other beneficiaries. As in other Net Lawman last will and testament templates, you can set trust provisions in detail, giving you greater control of how the trustees should invest and manage your estate. Also included with the template are extensive guidance notes, explaining clearly how to edit the template and how to sign the will correctly, and a short example letter of intent to your executors or trustees.
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About this document
This document template gives you control over who ultimately receives your estate. After bequests and legacies, the estate is put into (non-discretionary) trusts:
optionally, your home is put into a lifetime trust for a life tenant;
a proportion of your remaining estate is put into a lifetime trust that supports a beneficiary without that person (or persons) inheriting and gaining control of your estate;
the remainder is put into a trust for other beneficiaries (the purpose of which can be specified by you - you may wish to provide income, or you might want this proportion of the estate to be distributed soon after your death).
The life tenant and the lifetime beneficiary are likely to be the same person – probably a second husband or wife, an unmarried partner, a close single relative or someone else who is dependant on you. The lifetime interests end when the beneficiary dies or some other condition is met (such as remarrying, living with another partner or a child reaching adulthood), and the trusts are distributed to the ultimate beneficiaries. If some of the ultimate beneficiaries are your children (and under 18), then their share of your estate remains in trust. We use our own trust provisions in this template (adapted from STEP provisions) to give you maximum flexibility and control of how the trust is managed.
Like other Net Lawman will templates, there are provisions for legacies and bequests to be made to specific people before the estate is put into trust, and provisions for matters such as appointing guardians for children under 18.
Who should use this template?
Most commonly, we envisage that this template would be used by someone who:
wishes to take good care of a spouse or partner during his or her lifetime, but who also wants to make sure children or others ultimately have "something in the meantime";
wishes to provide for a dependant (such as a disabled adult child) without passing the share of the estate (and control of that share) to that person;
wants to ensure that children from earlier relationships are not disinherited, but still wishes the estate to support a current wife, husband or partner during his or her lifetime.
While the lifetime beneficiary doesn't inherit any of your residual estate, you could separately bequeath money or possessions to that person so that they do inherit something from you.
This isn't a gender specific template - it is as suitable for a man as for a woman. We follow normal, modern legal convention of using the masculine form of a word (e.g. testator) regardless of the gender of the person.
This template can be used for basic inheritance tax planning (largely as illustrated by HM Revenue and Customs), but we do not provide guidance on the subject. If the value of your estate could exceed the nil rate band, then we suggest that you seek advice from a qualified tax specialist before signing your will.
The NRB is currently £325,000 as in previous years. There is an additional allowance of £100,000 if you leave your home to a direct descendant. This extra band increases by £25,000 each year to 2020/21.
The law in this will
The law on wills is varied but precise. This will provides flexibility within that precise legal framework. The Net Lawman trust powers in this document free the trustees from some of the bonds of the Trustee Act 2001 that are unsuitable for trusts managed within your family and by professional advisers.
Note that in England and Wales, the law governs how jointly owned property (such as your home) can be passed on after your death. Unless you and you co-owner hold the property as tenants in common, your co-owner is likely to inherit your jointly owned property, regardless of your will. The main implications are:
that the inherited share of property may increase the value of the co-owner's estate beyond the nil rate band, so that on the death of the co-owner, more inheritance tax is paid than would have been if the co-owner did not inherit the share of property;
and that, since the property transfers to the estate of the co-owner, beneficiaries such as family from earlier marriages may be 'accidentally' disinherited.
If you are not familiar with the concepts and implications, then we suggest reading HMRC's website or consulting with a tax expert or solicitor before creating your will.
The law on wills can seem complicated. We have prepared a number of short articles to explain the more difficult legal concepts. You may like to read some of our articles on how to write your will.
When to use this will
You can write a will at any time in your life. Most people consider a new will when their financial circumstances change, or when relationships change. The Law Society advise that you review you will every five years, and that you make a new will after a major life change such as having a child, marriage, separation or divorce. It is possible to change a will without making a new one, but a new one is usually the preferable option.
Document features and contents
- Revocation of all earlier wills
- Appointment of executors and trustees
- Legacies (gifts of money)
- Bequests (gifts of possessions)
- Instruction to executors to gather in assets
- Creation of trust containing share of house and nomination of beneficiary for life (creation of a life tenancy)
- Creation of two trusts for different beneficiaries holding the residual value of the estate (using flexible trust provisions that you can change to suit how you want the trust to work)
- Options for early termination of life interest and life tenancy
- Gift over provision if the beneficiary does not survive you by more than a given time
- Options for small bequests and legacies to children without involving a trust
- Option to treat past gifts as included or excluded
- Payments to executor(s)
- Warning to executors on valuations
- Alternative wishes for burial / cremation / use of your body for advancement of science
- Appointment of guardians for children
- Signatures and witnesses
- Example letter of intent
This document was written by a solicitor for Net Lawman. It complies with current English law.
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