Estate planning for every type of family

Families today come in all shapes and sizes, redefining the traditional social structure of a husband, wife and 2.4 children.

We support all types of family and recognise that those who fall outside the ‘nuclear’ family set-up may have specific estate planning needs. Our expert lawyers can help a wide range families including:

• Solo parents
• Surrogacy arrangements
• Adoptive and foster parents
• Blended families
• Bereaved families
• Those who have chosen not to or have been unable to have children
• LGBTQIA+ families

We can advise on issues such as:

• Making a will and estate planning
• Minimising your exposure to inheritance tax
• Creating a trust or family investment company
• Creating lasting powers of attorney
• Making a post death deed of variation

What do solo parents need to think about when it comes to estate planning?

Solo parents (as with all parents) need to consider various matters when it comes to their estate planning.

It is important as a parent to consider your will.  Under the terms of your will, it is possible to appoint a guardian who would be responsible for looking after your child in the event you were to die before the child reaches the age of 18.  The guardian is often (but not always) a family member and would have day-to-day care for your child in the event that there was no one else who had parental responsibility.

For children who are born to parents who are not married or not in a civil partnership at birth, it is the parents’ names registered on the birth certificate which confers parental responsibility on them.  If, for instance, a child is born and the father is not registered on the birth certificate, the father does not have parental responsibility for the child (but could apply to the court to be granted this and the birth certificate amended).  If you are a solo parent and there is another parent named on the birth certificate, the surviving parent would have parental responsibility and should therefore take care of the child in the event of your death. It is important in that instance that you agree with the surviving parent who should be appointed to look after the child on their subsequent death, where possible.  Appointments of guardians need not necessarily be in your will but they do need to be in writing in order to be effective.

Another issue to consider is how to structure your estate for the benefit of your child on your death, such as whether you would like the child to receive your estate upon reaching a certain age (such as 18, 21 or 25) or whether it is appropriate to put in place some form of formal trust structure where your chosen trustees (usually your executors) have discretion as to when your child can benefit and how.  This also provides more flexibility for providing for your child during their minority and can allow (should you wish it to do so) payments to be made to the guardian to cover rehoming them to find a larger home in order to be able to care for your child.  Advice should be sought about this to ensure that any contribution to a property returns back to the trust created by your will once the child reaches the age of majority (or older), again at the trustees’ discretion.

The other thing to think about is incapacity as a solo parent such that you become unable to look after your finances or your child through illness or otherwise.  It is important that you consider putting in place a Lasting Power of Attorney (LPA) so that your finances can continue to be managed for your child’s benefit under the terms of the LPA (such as payment of school fees, school expenses, holidays etc).

In terms of parental responsibility, it is not possible to confer parental responsibility under an LPA for your child should you lose capacity, but there are steps that you can take to set out your wishes about care of the child which would be taken into account.

How should those involved in surrogacy arrangements approach estate planning?

Children who are born to surrogates are legally under current law treated as the child of the woman who gives birth to the child (and any husband or civil partner that she may have).  This means the intended parents have to go through the process of an adoption/parental order in order to be recognised as the parents of the child born through a surrogate.  For those going through a surrogacy arrangement, it is advisable to consider what would happen to the child if the surrogate died before the parental/adoption order is finalised. This could include the appointment of a specific guardian for the surrogate child as well as structuring the surrogate’s estate to mitigate the chances of the child bringing a claim against the surrogate’s estate for reasonable financial provision. For these purposes, a surrogate child is not treated as a child of the surrogate when determining who receives their estate.

Are there specific things adoptive and foster families need to think about when it comes to estate planning?

Once children are adopted, the adopted child is treated as a child of the adoptive parent and has the same rights as a child who is genetically related to the parent.  It also means that the adoptive parent has parental responsibility for the child and has to ensure that the child’s rights are looked after and the parent adheres to the responsibilities they have to the adopted child.

For adopting parents, the child would not be treated as theirs in until the adoption order is granted and therefore adopting parents may want to consider putting in place a temporary will, particularly if they are fostering the child pending the adoption order being finalised.  As they do not have parental responsibility prior to the issuing of the adoption order, adoptive parents cannot put in place guardianship provisions before the adoption order has been granted.

A child in foster care will not automatically become a “child of the family” no matter how long term the foster placement is.  As such, if foster parents wish to benefit a foster child in their will they need to do so expressly rather than relying on a definition of “children”.  This also means that a foster child will not be in the class of people who could automatically bring a claim against the estate of a foster parent for reasonable financial provision.

What should special guardians consider when it comes to estate planning?

Special guardians are appointed by the Court when it isn’t appropriate for a child to live with their birth parents but adoption is not right for them either.  Special guardians have the same rights as parents in terms of being responsible for making decisions for the child, such as medical treatment, schools etc.  On the granting of the order, parental responsibility is granted to the special guardians, but that parental responsibility is shared with the birth parents.  As such, following the order, some decisions about the child continue to rest with those with parental responsibility.

As special guardians have parental responsibility for children, they should consider the structure of their wills to ensure adequate provision is made for the care of that child on death.  They should also consider powers of attorney to ensure their attorneys can make financial provision for the child due to incapacity.

How can blended families best approach estate planning?

There are various points that those with blended families need to consider.

For the adults, they will of course want to ensure that their surviving spouse/civil partner/partner is catered for in the event of their death.  However, many people will want their assets to ultimately revert to their children, so long as their partner is taken care of during their lifetime.  There are various ways to provide for this, which include trust structures and, sometimes, relying on the partner giving effect to your wishes.

For unmarried couples, there are various tax consequences to consider as, unlike spouses/civil partners, there is no spouse exemption on whatever you leave to a non-married partner.  Care also needs to be taken to ensure that the partner is adequately provided for to avoid them having the possibility of bringing a successful claim against your estate after your death for reasonable financial provision.

What are the estate planning considerations for those families who have lost a child?

Sadly, there are people whose children die before them and they are then faced with difficult decisions about where they would leave their estate. There are a few ways that you may like to think about leaving the estate (or the share of your estate) that you would otherwise have left to the child that has died, such as:

• To your grandchild(ren) of the child that has died. This may include some form of trust structure to ensure that what you leave them is used wisely and managed in a way that it does not do more harm than good
• If your child died without leaving children, you may want to think about:
  • Leaving their share of your estate to your other children (if applicable)
  • Leaving their share of your estate to charity
  • Creating a charity in your lifetime (or a charitable trust in your Will) in memory of your child, so the money can be used for a purpose that is personal to you and your estate passing to the charity you have created on your death.

You may also need to review other estate planning documents that you have in place such as existing trusts, powers of attorney etc as a result of your child’s death.

Are there key estate planning considerations for those without children?

For those without children, there can often be competing things to think about.  Firstly, if you are married or cohabiting with someone, you may want to think about providing for them in the event of your death, but with your estate reverting to other beneficiaries thereafter if, for instance, you would not want your whole estate to go to your partner’s chosen beneficiaries.

There are also tax consequences to consider, given the current inheritance tax (IHT) legislation does not allow those who do not have children or linear descendants to be eligible for the additional tax free allowance known as the Residential Nil Rate Band (RNRB). The definition of “descendants” for this purpose is wider than the standard definition and, as well as including your lineal descendants (which automatically includes adopted descendants), it also includes spouses of your lineal descendants, step-children (if you are married to their parent), and children in respect of whom you are appointed legal guardian or special guardian when they are under the age of 18.  For those who do have children / descendants within this wider definition, their estates can potentially benefit from the RNRB although there are some additional conditions that also need to be satisfied.  This means that those who do not have children ultimately end up paying more IHT than those with such children, given they lose the additional allowance that is available.

In addition to thinking about your estate planning and your will, you also need to think about LPAs and who would assist you with managing your finances and caring for you in the event of incapacity in the future.  This may be family members or, for instance, you may choose to appoint a professional to be appointed to act for you in relation to your finances rather than giving this responsibility to a family member or friend.

How should LGBTQ+ families approach estate planning?

The LGBTQ+ community has fought hard over the years to be treated the same as heterosexual couples.  It is important for LGBTQ+ people to ensure their estate passes in accordance with their wishes on death.

There are similar issues to think about for the LGBTQ+ community as for those who are solo parents, namely thinking about their wills and LPAs.  For those where children are involved, the points about guardianship and incorporating potential trust structures are also relevant too.

If you  have family members who are transitioning (or have already transitioned), you may want to consider redrafting your wills to ensure they clearly reflect the new gender identity of the person that has transitioned.  Under the Gender Recognition Act 2004, an individual’s gender will not be legally recognised until they have obtained a gender recognition certificate.  This means it is advisable for those who have made wills after the Act came into effect (4 April 2005) to review their wills to ensure they give effect to the right instructions.  For instance, if you leave your estate to “your sons equally” and your son has obtained a gender recognition certificate, it will be necessary to check the date the will was made because if the will was made before 4 April 2005, the gender from birth is what is recognised for succession purposes i.e. son, not daughter.

We have one of the largest and most experienced teams of will, estate and tax planning lawyers in Kent and the South East, which has been trusted by generations of families. We work with you to protect your assets and pass on your wealth to the next generation in the way that best suits your circumstances.

Our estate and tax planning lawyers have extensive experience of supporting high and ultra-high net worth individuals and families with complex asset structures and international elements. We can help you to plan for the future and minimise your tax liabilities, for example through the use of trusts and other appropriate structures.

Working with us, you will benefit from the support and collective experience of the whole firm. We offer a strong network of lawyers to provide a comprehensive service, including probate, trust management, tax compliance, family law, The Court of Protection and buying or selling a home.