A Tax Efficient Will:
Should you still have one then?
The short answer to this is no. Since new tax rules were introduced in April 2017, having these kinds of Wills can actually mean you pay MORE tax.
These trusts mean you may not be entitled to the new "Residence Relief" for Inheritance Tax.
But, before you frantically rip up your Will, there are still reasons why you may keep these trusts.
You may not be married to your partner. In that case you could use the old Discretionary Trust to minimise your IHT liability whilst also providing for your partner.
And on top of that, the Discretionary Trust is a similar way of protecting assets as the Life Interest or Property Trust Wills. The surviving spouse or civil partner could be looked after by the Trust, but the assets in the Trust should not be lost to care fees (although again you must take specialist and subjective advice on this), and if the surviving spouse or civil partner loses their mental capacity the monies will not be locked away in the Court of Protection.
If you have a tax efficient Will and are not sure what to do, please get in touch on 01623 448318, or email firstname.lastname@example.org.
And if you don't know whether or not you have one of these trusts, then still get in touch. We can have a look at a copy of your Will if that will help, and give you a straight answer.