An increase in the number of people marrying later in life, sometimes 2 or more times is likely to have a negative Inheritance impact on the dependents of previous marriages.
The Office for National Statistics (ONS) has recently reported a 46% increase in the number of brides and grooms aged 65 in a decade, from 7,468 in 2004 to 10,937 in 2014. The ONS data also highlights that 92% of the brides and grooms aged 65 and over in 2014 were divorcees, widows or widowers, with only 8% getting married for the first time.
So what does this data tell us? The indications are that there could be children from a first marriage that would need protecting financially. Often second or third marriages can bring new responsibilities, as more often and not they will already have a family of their own. The unintended consequence of these marriages could be Inheritance issues for both the second (or third) spouse and children from an earlier relationship if they are not fully protected.
Making a well drafted Will ensures your loved ones are provided for once you have passed away. However, according to The Will Writing Industry in 2018 Report, 25% of UK adults over 55 have not made a Will, with only 34% of people between 25 and 54 obtaining an up to date Will. Even more worryingly, only 26% of parents with children under the age of four years old have a Will in place. More importantly, keeping a Will updated when circumstance change is critical to protecting your wealth and your beneficiaries.
Another Tax efficient method to secures assets (such as money) for people to access at a set point is a Trust. An example of this is to put away money in a trust for children once they reach a certain age, such as 18 or 21, There has been a significant increase in the number of people using Trusts in the last 5 years, even though they have existed in the UK since the time of the Crusades!
Trusts can be used to provide for a spouse after death, while also protecting the interests of children from previous marriages or relationships. Putting money in a Trust can also be beneficial for Inheritance Tax Planning as it means the money no longer forms part of the Estate on death, thus, reducing the Inheritance Tax liability.
Redwood is one of the Souths’ leading Pensions, Investments, Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning and Probate, we can advise on any situation. Join us at one of our Free Public Information Seminars: Book online Book Me A Place!, Call us on 01489877 547 or Email info@redwoodfinancial.co.uk to book a FREE Initial Meeting with us to review your financial planning needs.
