A complex Will is one that does not leave everything outright to a spouse/partner or children. There are two common types of complex Will

Property Fund Wills

• A Property Fund Will is ideal for couples whose main asset is a property and they wish to avoid the surviving spouse depleting the capital of the property, whether voluntarily or due to re-marriage or care costs.
• Such a Will gifts the deceased’s share (usually half) of the house to the children but as a delayed gift.  The gift does not actually pass to the children until the surviving spouse has died and he/she has the right to occupy the house, move house and have any sale proceeds (or excess sale proceeds from a downsize) invested and receive the income.  If the survivor vacates the house but does not sell it they can also keep any rental income.
• An upside of this style of Will is that it protects the value of the property for the ultimate beneficiaries chosen by the Testator (Will maker) but still provides a home and income for the survivor.
• A downside of this style of Will is that the survivor does not inherit the deceased’s share of the house to spend as they wish.

Discretionary Trust Wills

• A Discretionary Trust Will is ideal if the Testator (Will maker) does not wish their ultimate beneficiaries to inherit outright but would prefer other people (called Trustees) to be in control of what/when the beneficiaries might or might not inherit. 
• Trustees can be in control of who occupies a house, who has capital and who has income or any combination of the three.
• These Wills may also be useful for co-habitees to avoid paying more inheritance tax than is necessary. This is because co-habitees cannot transfer each other’s inheritance tax allowance to one another like married couples can and must use them individually. A co-habitee could borrow from the Trust and then pay back to the Trust (whilst alive or after their death) to pass on to ultimate beneficiaries using the first to die’s allowance from the Trust!
• You can put a house or cash in the Trust or both.  You can put your entire estate in the Trust or such sum as you select.  It is not usual to put more than your inheritance tax allowance (usually between £325K and £650K depending on your circumstances) into such Trust and whether a Trust is appropriate for you depends on your personal and financial circumstances.
• An upside of this style of Will is the flexibility and control that the Trustees have over the assets and the ability to also distribute the estate in the way that is most tax efficient.  It allows your Trustees to consider the ‘real life’ position of your beneficiaries at and after the date of your death rather than you having to second guess in your Will.  So for example if you had a beneficiary who had gone bankrupt  by the time you had died then the Trustees could keep hold of their inheritance until they are cleared from bankruptcy.
• A downside of this style of Will is that the Trustees have to run the Trust and take investment advice and/or legal advice from time to time.  The Trust is a tax entity in its own right and may have taxes to pay from time to time but these can be kept low if you do not have more than your inheritance tax allowance in the trust.

If you would like to make a Will, or have any questions about Wills, please contact our Wills Team on 01606 74301.

Intended as a blog and should not be legally relied on. Always seek advice.