For many couples, drawing up a Will is a joint process. They will often go together to see their solicitor and will discuss the terms they’d like to formalise.
While a Will is an individual document, it’s down to each person to set out their wishes (and that autonomy is really important), two people in a relationship, marriage or civil partnership will often have a lot in common when it comes to their intended distribution of their estates. In many of these cases, our instructions will be to structure the two Wills to simply leave everything to the surviving partner and then to the couple’s children on the surviving partner’s death. Of course, other provisions – for example, funeral details – can be made alongside this.
Where two Wills are so similar that they virtually replicate each other, they’re known as mirror Wills. You don’t have to be in a couple to make them; it’s an option open to friends or brothers/sisters, for example. However, they are most commonly used by husbands, wives, cohabitees and civil partners.
Aside from the administrative ease in putting in place mirror Wills, there are some distinct advantages to structuring personal arrangements in this way. The first is that, as with any Will, it will allow you to provide for a partner to whom you’re not married or in a civil partnership with. Without a Will, the rules of intestacy would likely preclude them from inheriting from your estate.
But one of the most significant aspects of mirror Wills in particular is the potential for avoiding inheritance tax. Married couples and those in a civil partnership will be able to take advantage of the rule that allows the tax-free transfer of assets between spouses. The survivor will also inherit the deceased’s personal inheritance tax allowance and, once the survivor dies, his/her allowance can be added to that so that the couple’s children – who usually stand to benefit next – could take advantage of the combined tax allowance of their parents. It means that more (up to £650,000, tax-free) can be passed on to the next generation. Some couples will also benefit from a main residence nil-rate band of £150,000 (£175,000 from 6 April 2020) per person.
Mirror Wills are not without their potential drawbacks, however. One of these is the relative ease with which they may be changed. As each partner retains control of their individual Will, there is scope for them to instruct their solicitor to amend it – and their partner could be oblivious to that. While we encourage clients to keep all types of Wills under review and to update them to reflect changed family circumstances or significant acquisitions or disposals, those who make mirror Wills tend to enter into the process with an expectation that it’s all about togetherness. Discovering that your partner had changed their Will can be devastating.
Similarly, where the surviving partner goes on to form a new relationship, it is perfectly possible that they would change their Will so as to leave their (your) estate to that new partner. It means that your children, who had stood to benefit by virtue of your mirror Wills having provided for them in the event of the surviving partner’s death, are disinherited. It’s a situation that can cause huge problems within families.
One way of avoiding that is to instead create mutual Wills. In the same way as mirror Wills, they set out virtually identical terms, but they are less easily changed. Both parties must, in theory at least, agree to the Will being amended, so there is little opportunity for a nasty surprise. And once one spouse dies, the Will cannot be changed at all. It remains firmly in place, even if the survivor remarries. And so, while this gives couples greater certainty during their lifetimes, it does mean that both parties need to make absolutely certain that the terms they’re putting in place are the right ones.
A trust in a Will is probably the best way of doing this and is the only means of ensuring absolute certainty over your assets. Please ask your solicitor for further information about Will trusts as they can be very complex.
Getting good legal financial planning advice has to be the starting point. There are actually many, many options when it comes to structuring arrangements for the future, and specialist Wills, trusts and probate solicitors like us will help you find the right one for you. Because making sure that your future, and that of your loved ones, is financially secure can mean you’re better able to enjoy the here and now. It’s peace of mind that comes from making the best decisions and understanding exactly how your family stands to benefit from the wealth and other assets you’ve worked hard to accumulate.