Wills & civil partnerships

Will Services for Civil Partners – A Case Study

Joseph and John are civil partners and they are both in excellent health. Joseph has a good job and has a company pension which includes death in service benefit. John also works, but his pension does not include any death in service benefit. They want Wills to ensure that when one dies the other will be provided for, and that once both have died their respective families and friends will benefit from their individual estates. Their assets comprise:

Asset	Value
Home (jointly owned)	£350,000
Outstanding mortgage	-£262,000
Net	£88,000
Life cover	£325,000
Death in service benefit	£175,000
Personal possessions	£20,000
Total estate	£608,000

There is exemption from Inheritance Tax on all assets passing between civil partners on death, so provided they leave all assets to the surviving partner on first death, no tax will be due at that time. When the second death occurs, if no part of the allowance for Inheritance Tax of the first to die has been used, the appointed executors may claim a 100% increase in the threshold allowance for Inheritance Tax applicable at that date. Accordingly, provided executors are able prove entitlement to an increased allowance, no Inheritance tax should be payable on the estate. This will need to be reviewed periodically, as the value of the estate will probably increase over time and additional estate planning may be appropriate at a later date.

Joseph and John decided to appoint two of their friends to act as executors and to be responsible for carrying out the wishes expressed in their Wills. They have discussed this with them and obtained their agreement to act in these roles. Initially assets are to pass to the survivor of them and, once they have both died, they would like their assets to be divided amongst various family members and charities.

I advised them of a potential difficulty that might arise once the first death has occurred. At that time there would be nothing to prevent the survivor of them from creating a new Will leaving the assets to a new partner or any other beneficiaries of their choosing. To ensure that their current wishes are carried out it would be necessary to employ trust provisions. This would allow the survivor to have use of the assets during the remainder of his life and then to pass to their chosen beneficiaries on his death.