Bloodline Wills

What is a bloodline Will?

It is a Will that leaves assets to children, grandchildren and maybe great grandchildren and even great, great grandchildren.

It could also include nephews, nieces and great nephews and great nieces, etc. if there are no children. Generally, the term bloodline would not include spouses or partners of your children or their relations. It’s a type of Will that is able to protect your assets for future generations down the bloodline.

What is a bloodline inheritance?

It’s an inheritance received as a result of estate planning that’s been designed to keep your assets and wealth within the family’s bloodline.

How do bloodline Wills work?

Bloodline Wills would normally create a Trust designed to protect your assets and keep them within your family or bloodline.

The Trust nominates the potential beneficiaries – normally your children, your grandchildren and descendants. The Trustees have the power to distribute and lend the assets to any of the potential beneficiaries.

You can make your spouse or partner and your children the Trustees and Executors of your Will. The Will can give your spouse or partner a Life Interest (the legal right to enjoy the assets for their lifetime) and then give your children the ability to distribute the assets or lend out the assets in accordance with your wishes.

You can also leave a Letter of wishes with your Will, to give guidance to your Trustees and explain how you would like them to make decisions. It can be very flexible – which is why we also call these Flexible Family Trust Wills.

When should you look at a bloodline Will?

Most people, and certainly those who own a house and also have children, will want to consider these types of Will. They can protect assets and ensure they do not all end up with the surviving spouse of your children – or worse still, with the family of the surviving spouse’s next husband or wife.

It’s worth noting that basic Wills, which leave everything to the children, do not guarantee that your estate will pass down to your grandchildren. Basic Wills normally leave everything to your spouse or partner and then to your children and grandchildren.

But if you die first, and your spouse or partner becomes vulnerable and confused, perhaps, or gets remarried, you could find that everything you’ve worked so hard for ends up going down a different bloodline.

Bloodline Wills can also protect your assets for your descendants if your children get divorced or become bankrupt.

Can a non-blood relative inherit?

Yes. The Testator, the person who writes the Will and gives the instructions, can include whoever they wish as potential beneficiaries. They could, for example, add stepchildren or adopted children. The term Bloodline Wills implies that everything just goes down the bloodline, but in reality you have the flexibility to choose who you want to inherit.

How much do bloodline Wills cost?

Our bloodline Wills cost from £695 plus VAT for a single person, or £945 plus VAT for a couple [podcast recorded in July 2024].

How do I get a bloodline Will? What’s the process?

You enter your details on our website and we will contact you for an appointment. At the appointment, which we could do face to face, on Zoom or over the telephone, we will give you lots of time to ask as many questions as you want.

We make sure that you’re completely comfortable that every question has been answered in the way that you’re expecting. When you want to go ahead, we will take your instructions and produce a Will for you to look at as a draft.

If you’re happy with the draft, we’ll send you out the final Will on coloured paper to be signed and witnessed.

Please visit our website or call us on 0208 568 9602.

What are the advantages and disadvantages of a bloodline Will?

As we’ve seen, these Wills can protect assets for your children and descendants. The Trust created by the Will can last for 125 years, to allow your children to receive their inheritance (usually as a loan from the Trust) and keep their inheritance safe in event that they get divorced or become bankrupt.

The disadvantages, I suppose, are mostly related to administration. The Trust must be registered with HMRC. There’s no requirement to register the Trusts during the Testator’s lifetime, as the Trusts are created by the Will – they don’t exist until someone dies.

The Trustees, who might be your children or trusted friends, have a duty to follow your wishes and consider the needs of the beneficiaries: your children, grandchildren and

descendants. They need to consider them at regular intervals.

Key times might include when they need to pay for education, put a deposit down on their first home, or to loan out all the inheritance that a child would expect from their parents.

So the Trustees should have a meeting once a year. Depending on the decisions made, and the age of the children and grandchildren etc, they may need to seek financial and legal advice from time to time. But if they follow the guidelines of loaning money to the beneficiaries, the amount of admin can be kept to a minimum.

How does a bloodline Will help with Inheritance Tax?

These Trusts can save Inheritance Tax on a generational basis. Your children can receive their inheritance in the form of a loan from the Trust created by your Will.

This means that the value of the assets remains in the Trust. So, your children (when they die) can then leave your assets to your grandchildren free of Inheritance Tax.

This is quite often misunderstood. We go into this in more detail in other podcasts and there is a link on the website to a Discretionary Trust Wills podcast and another called Tax Efficient Wills.

So, hopefully you’ve got a good idea of what a bloodline Will is in concept, and then you can look at the tax advantages on those other podcasts.

Please note that a 10-year anniversary charge may be payable (a tax of approx. 6% on assets above £325,000) if the Trust continues 10 years or more following the death of the Testator.