The Royal Family has been making global headlines recently, and the importance of privacy for them, and others, has been brought to mind.
Many people, including those in the public eye, make a specific kind of Will which gives their heirs a degree of much sought after privacy. It contains a discretionary trust so that effectively they give their estate to people they trusted (her Trustees), but not to keep for themselves.
The Trustees can distribute the estate as they think fit, but with two provisos to protect the intended heirs.
One proviso is that they can only distribute amongst the people named, or described, on a list in the Will. Any potential heirs will have been in the list, but not the amount they would inherit, so that, unlike the Will, their inheritance cannot be made public after the death. In some cases, the list can be extended after death, depending on the exact type of Will, so that the names of some heirs never appear in a public document.
The other proviso is that they pay attention to, but do not have to obey, a ‘Letter of Wishes’, written by the ‘Testator’ - the person who has made the Will.
.The privacy protection comes from the fact that only the Will itself, like all Wills, becomes a publicly-accessible document after death, while the Letter of Wishes remains private.
The Letter of Wishes can be used to set out other details, for example why one beneficiary should be of a certain age, why one needs more help than another, why distribution should be delayed if divorce is likely, or why one sibling should never inherit.
These Trust Wills are useful for more than just privacy; they also offer great flexibility and can simplify complex estates. The Letter of Wishes can be regularly updated and enables the trustees to do what is best for the heirs, with all the benefit of hindsight. They will know what the tax law is at death, what the assets are, and what the family dynamics and needs are.
If you have any questions in relation to this article or require assistance in matters concerning Wills or Succession Planning our Private Wealth Team at Hewitsons LLP will be happy to assist.