What Are Bloodline Wills?

Having a Will is essential, but have you ever heard of a bloodline Will? Although they are similar to regular Wills, there are some key differences that influence who your beneficiaries can be.

Bloodline Wills Defined

Simply put, bloodline Wills are Wills that ensure that your descendants – in this case, only direct descendants such as children or grandchildren – can inherit your possessions and assets. 

Although you can do this with just a regular Will, bloodline Wills contain a bloodline trust, which provides more protection from complications that could occur in the future. Effectively, it ensures that your children and grandchildren will receive the inheritance you want them to have, no matter what happens. Like other trusts, you will appoint trustees to manage your assets after you pass away.

Even with a bloodline Will, you can still provide for your partner and any adopted or step-children that you have. You can also leave assets and possessions to other people outside your direct descendants, such as friends or family members – this simply has to be specified in your Will.

Why Establish a Bloodline Will?

There are many reasons why you may consider setting up a bloodline Will, including:

  • Your child is going through, or you think they are likely to go through a divorce
  • Your assets will stay within your family 
  • You are concerned about protecting inheritance for your grandchildren 
  • You want to protect your family home from being sold to cover potential care fees in the future

Many people choose to establish bloodline Wills to protect their children’s inheritance from their partners or spouses. When creating your Will, it can be worrying to know that your child’s inheritance could be at risk at some point. 

However, a bloodline Will removes this concern, as it can follow life interest. This means that the trustees can choose when to release the assets within the trust, protecting them from cases of bankruptcy and divorce. In the case of divorce, this provides you with peace of mind, as your assets will only be passed to them and not their partner. 

One of the key benefits of a bloodline Will is that it prevents the sale of your assets to fund care fees. The trust contained in a bloodline Will protects your assets, as they are no longer officially yours, so your local authority may not consider them when evaluating how much you can contribute towards care. This adds an extra layer of protection for your beneficiaries as well, ensuring that your assets will pass to them even if you need care. 

Bloodline Wills Vs. Mirror Wills

Bloodline Wills share some similarities with mirror Wills, but some differences must be considered. Mirror Wills are a simple form of Will you make with a partner. They are almost identical and allow couples to leave everything to one another when they pass away, with the surviving partner, in turn, leaving everything to their children upon their death.

Mirror Wills are often used in estate planning, but they also come with some significant drawbacks, such as:

  • Disinheritance – if your partner remarries after you pass away, they may change their Will to leave their assets to their new spouse, potentially disinheriting your children and others you wished to inherit. 
  • Exclusions – mirror Wills can sometimes be too general, and you may exclude people you want to inherit, such as step-children and children from previous marriages.

On the other hand, a bloodline Will eliminates the risk of potential disinheritance and exclusions by ensuring that only your descendants inherit. Therefore, your partner will not be able to change their Will and reduce the inheritance your children receive. 

The Disadvantages of Bloodline Wills

That said, some potential disadvantages of bloodline Wills should be considered when planning your estate. 

When you pass away, your beneficiaries will not have immediate access to the assets within the bloodline trust – the trustees have to agree to release the funds and assets. Alongside this, the assets within a bloodline trust can only be used for the beneficiaries’ health, education, maintenance, or support. Some find this preferable as it is clear where their assets will be going, but others may find this too restrictive.

Another disadvantage of bloodline Wills is that they limit the use of the Residence Nil Rate Band (RNRB). This extra allowance allows you to take advantage of an additional £175,000 on top of your estate’s £325,000 tax-free allowance. If you add your property into the bloodline trust, the extra £175,000 is forfeit, and you are only allowed to pass on £325,000 tax-free or £650,000 if you have a partner. This may not be a problem for estates under this threshold, but for larger estates, it can present a problem and lead to a large Inheritance Tax bill. 

Creating a bloodline Will is also more expensive than setting up a standard Will because of its complexity. However, many find that this initial cost pays for itself, reducing the inheritance lost to care fees, divorce, or disinheritance. 

Is a Bloodline Will Suitable for Me?

Bloodline Wills can be suitable for some people but not others. It depends on your specific circumstances and wishes. 

If you have concerns about your children’s relationships or want to add additional protection to your assets, this might be a good option. There is no one-size-fits-all solution to estate planning, so be sure to evaluate your options before choosing a bloodline Will. 

Contact The Planning Bee today for more information about the options available to you when creating your Will. Our legal experts will advise you on which approach would be best and how you can make Wills and trusts work for you.

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