Proper Planning Must Be Comprehensive

Many wills involve a degree of planning for Inheritance Tax (IHT) as well as just the appropriate division of the estate, but for any plan to be effective, it is essential that when the will is drafted, the solicitor has full knowledge of all the assets involved, which can include financial products or plans set up years prior to the drafting of the will.

The dangers of making a will on the basis of less than full knowledge were clearly illustrated in a recent case in which a will was drafted in 2011 for a woman who died in 2013. The woman had left legacies for the children of her late husband’s nieces, for whom she had previously set up trusts. Her intention was to provide them with a total of £200,000 each on her death and legacies were set up in the will of £54,000 each to accomplish this. However, she overlooked the fact that the trust she had created did not pass to them on her death but passed into the ‘residue’ of her estate to be divided among the beneficiaries generally.

In order to achieve the net position that had been the woman’s intention, the beneficiaries took legal action against the professional advisers who set up the trust and the will draughtsman.

Although the case against the will draughtsman was settled before trial, that against the financial advisers continued. However, the judge accepted that the liability lay with the will draughtsman, not the financial advisers. Their advice was not sufficiently ‘proximate’ to the drafting of the will and, accordingly, they did not have responsibility for the outcomes for the beneficiaries under it.