%20Logos%20-%20Yellow%20(Transparent%20Background).png){kind=small}
Case Study – Blended Family
Situation
Brian and Sherri are married and have one daughter together. Brian also has two adult sons from a previous relationship.
Their main asset is their home, which they own equally (50% each). Brian also has personal savings and investments in his sole name. Their current wills leaves their assets split across the children, but they wish to review this to ensure their own personal wishes are fulfilled and to ensure that the surviving spouse can continue living in the family home should one of them pass away.
Concern
After both have passed away, Brian would like his assets to be divided equally between his three children. Sherri, however, would like her share of the house to pass solely to her daughter, as she does not have much of a relationship with Brian’s sons.
They are also mindful of the potential risks surrounding their children’s relationships and understand that an inheritance received outright could be exposed to claims in the event of a divorce or relationship breakdown.
Solution: Solidus Beneficiary Protection Plan
A Solidus Beneficiary Protection Plan would provide Brian and Sherri with new Wills leaving the estate of the first to die on a life-interest to the survivor. This arrangement allows the surviving spouse to continue living in the home and receive income from other assets if required, while ring-fencing the underlying capital value.
Security for the Surviving Spouse
The Life Interest structure ensures the surviving spouse can continue to benefit from the assets during their lifetime, providing financial stability and the right to remain in the family home if desired.
Protecting the Underlying Capital
While the surviving spouse can benefit from the income or use of assets, the capital itself remains protected within the Trust structure. This helps ensure that the assets ultimately pass according to Brian and Sherri’s wishes.
Structured Inheritance for the Children
On the second death, Sherri’s estate and one-third of Brian’s estate would pass into a Trust for their daughter, while the remaining two-thirds of Brian’s estate would pass into a separate Trust for his sons. This structure allows each part of the estate to be directed clearly to the intended beneficiaries.
Protection from External Risks
Because the assets are held within Trusts rather than inherited outright, they can be protected from risks such as divorce settlements or other third-party issues affecting the beneficiaries.
Generational Inheritance Tax Planning
Keeping the assets within Trust structures may also provide potential Inheritance Tax planning advantages for the next generation, helping preserve more of the family’s wealth for future descendants.
