Substantial Lifetime Gifts

…don’t get caught out!

Don’t get caught out when giving a substantial gift during your lifetime.

moneyIf you have ‘Willed’ someone a portion of your estate and, after the Will was written, you give them a substantial gift before you die then, unless you take appropriate steps, that gift will be presumed to be part of the portion of the estate which you left them under your Will.

This might be exactly what you want to happen if you are looking to help someone along now but also to ensure an equal spread once you die. So, for example…

Lets say you have 2 children, Janet & John, and your Will splits your estate 50/50 between them. If you give Janet £50,000 to help her buy a house. When you die that £50,000 gift will be presumed to be part of her 50% and therefore John will actually receive £50,000 more than Janet Bill when the residue of your estate is distributed – thus ensuring that they have each received the same amount in total.

But…

If you wanted Janet to have the £50,000 plus half of your estate when you die you need to take specific action to ensure that can happen. You could re-write your Will after the gift because this presumption isn’t retrospective to gifts given before your Will was written. Or, you could write a letter clearly specifying your wishes – it might be a good idea to get your signature witnessed.

Either way the choice is yours – but only if you know the rules and take the appropriate steps to ensure that you wishes can legally be followed. It is no good hoping that Janet will get to have the extra £50k without taking action to make it happen.

However you wish to pass on your estate it can be well worth discussing it with your professional advisers first. You can be sure that somewhere there will be pieces of law which you don’t know about that can seriously impact on your wishes. Your professional advisors will deal with such matters daily and will be able to protect your wishes from the ‘interference’ of the law.