Beneficiaries Archives

Assets in the UK and France: Should I have one Will or two?

Posted on 2 February 202523 March 2025 by Sarah O'Sullivan

Before 17 August 2015, the usual advice to people owning property in both the UK and France was that it was preferable to have two separate Wills governing the assets in each country.

French inheritance law with its rules of forced heir ship for beneficiaries such as children applied to all French land and buildings, and for French residents, French inheritance law applied to their movable assets such as bank accounts too. The rigidity of these succession laws often posed problems for UK nationals who, for example, could not pass their assets entirely to the surviving spouse as they would in the UK, due to the entrenched rights of children.

In this article, French law expert and specialist in cross-border Will and Trust arrangements, Sarah Walker, outlines the issues that need to be considered if you own property or indeed, are thinking about buying property in France and have not addressed this in your Will.

How has the law changed in relation to succession?

With the arrival of the EU Succession Regulation known as Brussels IV in 2015, it became possible for British nationals living in either the UK or France to choose to apply English law, and the testamentary freedom that comes with it, to their French assets.

This has appealed to many people, not least because of the simplicity of applying one set of laws to your estate as a whole and having one universal Will covering all of your assets.

However, it is really important to take advice from a lawyer who is conversant with both English and French inheritance law and tax to see whether a choice of English law will be the best option in your specific circumstances, and also whether you should have one Will or two.

One Will or two, what’s best for me?

Whether or not you would be better off with a universal Will or separate Wills will depend on:

the location, value and nature of your assets
your personal circumstances and wishes regarding the distribution of your estate.

A cross border Wills specialist will be able to help you meet as many of your aims as possible and give you clarity about the inheritance tax position in both countries. It is particularly important to take this type of advice if you are resident in France or have plans to become resident in the future.

It is worth noting in this context that France and the UK have different views of residence and domicile and French tax resident status can apply to you more commonly than you might imagine.

What are the risks of ignoring French assets?

If you instruct your UK solicitor to prepare your English Will with the intention that you will see a separate lawyer to deal with France at a later date, the risk is

you may never get around to doing so;
you may run into problems if the two Wills are not compatible.

In some scenarios it can be the case that, through having a separate French Will, you may avoid the need for a Grant of Probate on your death if one is not needed for other assets in the UK.

It is fairly common for this to be the case with a married couple who own all of their assets jointly, for example. This can mean that your French estate can be dealt with more quickly than would otherwise be the case.

Are there any exceptions to how choice of law can be applied?

There are methods of owning French property which mean that a property will devolve outside the terms of any Will and regardless of any choice of law. These are:

a matrimonial property regime;
a corporate structure, or
some forms of joint ownership such as a ton-tine arrangement.

Most English solicitors will not have the expertise to advise on this, and yet clearly it is very important that the full picture in this respect is known before any Will can be prepared that incorporates the French property concerned.

Has inheritance tax been affected by Brussels IV?

Whilst Brussels IV allows for a choice of succession law, it has not changed the position at all with regards to inheritance tax. If you are domiciled in the UK or own UK assets, then consideration must be given to the inheritance tax implications in both countries if you also have property in France.

An English solicitor with knowledge of both French and English inheritance and tax law can be invaluable in helping you decide how best to structure your Will(s) in this respect.

For example, whilst you may now be able to choose to leave your French property to people unrelated to you such as stepchildren or an unmarried partner, these individuals will pay French inheritance tax at 60% on any share passing to them.

Potential tax and trust issues to be aware of

Some concepts that are possible under French law and which a French Notaire may suggest, such as including an “usufruit” in your Will can have negative inheritance tax consequences in the UK.

It is also important to bear in mind the potential issues that can arise when an English Will comes to be interpreted and administered in France following your death. In France there are ordinarily no Executors, instead the assets vest in the beneficiaries directly. Problems can sometimes arise if the French authorities seek to tax the assets twice on a perceived transfer of ownership to the Executors and then on to the beneficiaries.

If your English Will contains trusts then it is important to be aware of the French rules regarding tax treatment of trusts and the reporting obligations, which can be punitive. An English Will prepared without due consideration of the French position can cause complications in France when a French lawyer comes to transfer the property to the beneficiaries after your death.

Often it will be advisable to prepare a separate French Will or to draft the English Will in a particular way to avoid problems of this nature, or an unnecessary tax bill.

Finally, it is important that any steps taken or documents drafted for assets in either country dovetail together to avoid any conflict or accidental revocation. Giving proper consideration to these issues at the time you are preparing your Will can give you peace of mind and be of huge benefit to your beneficiaries through saving them time and money further down the line.

Will trusts can help you protect your loved ones

Posted on 2 August 202220 March 2025 by Sophie Soraf

Trusts often get bad press, being portrayed by some as vehicles to help the super-rich to avoid tax. While trusts can legitimately save tax for many people (most of whom are not super-rich!) their purpose is often to protect the position of loved ones.

Making a will involves consideration of many different factors and you should always consider, not only who you would like to benefit but how they should benefit. While the simplicity of outright giving will be appropriate in some circumstances, there are situations in which it may be more appropriate to protect the beneficiaries with some form of will trust.

What is a will trust?

A will trust can be thought of as a gift ‘with rules attached’. If you leave your assets to someone absolutely, you give total benefit and control of the assets given to them. They will own the assets and have the right to do with them as they wish. In contrast, where you leave assets to a will trust, you transfer ownership to trustees, who are charged with managing the assets for the benefit of beneficiaries. The will sets out who the trustees and beneficiaries are and the rules the trustees have to follow.

Some will trusts can be very simple, for example, if you leave assets to your trustees to hold for the benefit of your child when they reach age 18. It’s also possible to create more flexible trusts that give trustees discretion to decide who should benefit from capital or income and when that should be. You can also give different beneficiaries different rights, for example giving one person the right to benefit from the income generated by an asset, or to occupy a property for a set period, and giving other beneficiaries the benefit of the asset at the end of that period.

When you die, you give away all the assets in your estate under the terms of your will (assuming you make one, which you should!). For many people, this involves a significant transfer of wealth. It’s a good idea to consider whether you’re comfortable transferring that wealth absolutely or if you would prefer to use a trust.

Who are the trustees and what do they do?

The role of a trustee is to manage the assets in the trust and to exercise any discretions they are given. Depending on the wording of the trust, beneficiaries can act as trustees. You could also appoint outsiders such as trusted family members or friends or professional trustees.

The role of trustee is very important, and (as the name suggests) you should certainly choose people you trust! It is always sensible to take professional advice on the options and the factors to consider when deciding who to appoint.

You choose the initial trustees of a will trust under the terms of your will. You can either appoint the executors named in your will or separate trustees.

How does a will trust protect my family?

There are many different forms of will trust for different purposes. The protections offered and tax consequences will depend on the type of will trust chosen and you should always take professional advice on the different options.

Here are some of the many situations where an appropriately worded ill trust can protect your beneficiaries:

Where there is more than one family

If you, or your partner, have been married before or have children from a previous relationship, you might be concerned to ensure that your assets ultimately pass to your own children or family, while also looking after your spouse, if they survive you. A will trust can help to achieve this.

Where the surviving spouse may remarry or form a new relationship

Many people worry that if they leave their assets to their surviving spouse, their children may not inherit if the survivor remarries or forms a new relationship. Even if the survivor does not give away or leave the assets to their new partner, problems can still arise. For example, the new spouse might have a claim on assets if the new marriage ends in divorce, or they might make a claim for financial provision from the estate of the surviving spouse. Again, a will trust can reduce the risk of such problems.

Where the intended beneficiaries may be at financial risk

There are many situations where wealth left to a beneficiary may not end up going where intended, or may do them more harm than good, for example:

where the beneficiary is getting divorced or going through marital difficulties, there’s a risk that the inheritance may be included or taken into account in any divorce settlement.
where the beneficiary (or their partner) is immature, reckless, bad with money or at higher than usual risk of bankruptcy (for instance if they are engaged in risky business enterprises).
For young or otherwise vulnerable beneficiaries.

A will trust can reduce the risk of such problems arising.

Where an inheritance might affect the beneficiaries’ means tested benefits

Will trusts can often prevent the loss of a beneficiary’s means tested benefits, or reduce the impact of the inheritance on the benefits available.

Where an inheritance might complicate the beneficiaries’ tax position

An outright inheritance might complicate the beneficiary’s tax affairs if, for instance, they pay income tax at a high rate or their estate will be liable to inheritance tax on their death. While this is a complex area, the flexibility of will trusts can alleviate such problems, giving scope for some of the wealth to be used in a more tax efficient manner. For example, a child with significant wealth might prefer some of the trust funds to be used for their own children instead of them. A will trust can give the flexibility to focus the estate in the most tax efficient manner, depending on the circumstances at the time.

Where substantial wealth is involved

Substantial wealth (particularly when acquired suddenly) can cause its own problems. For example, it can affect a beneficiary’s outlook on life or the attitudes of those around them or increase their tax exposure. So it’s sensible to consider using a trust when passing down substantial wealth, even where the beneficiaries do not otherwise seem in need of protection.

How are will trusts taxed?

There are important tax issues to consider with will trusts including capital gains tax and income tax. The rules are extremely complex so it’s vital that you get specialist tax advice.

Will trust case studies

We’ve set out a couple of illustrative case studies of situations where a will trust might be useful.

Will trust case study 1

Gill, aged 70, has an estate worth £800,000 including her home (which is in her sole name), which she occupies with her second husband, Brian. She has two adult children (Simon and) Beth) from her first marriage, which ended in divorce. Brian does not have significant assets and is largely dependent on Gill. Brian also has two children from a previous relationship.

Gill would like to look after Brian if he survives her, but also wants to make sure that her assets pass to her children, after his death.

If Gill leaves the assets outright to Brian, then he will decide what to do with them during the rest of his lifetime and who to leave them to after his death. If Gill is uncomfortable with this, then she could use a will trust to control what happens to her estate after her death.

Will trust case study 2

Jake is a widower with an estate worth approximately £ 5 million. He wants to provide for his three adult children, Karen, John and Steven and their children after his death. However, he knows that Karen’s marriage is in difficulty and Steven has had money problems in the past. John has a significant wealth of his own and has mentioned that a large inheritance might cause tax problems.

Again, a will trust could be used to protect the shares of Karen and Steven and give flexibility for John’s children to receive some of the trust fund instead of John, if this is more tax efficient.

Do I have to sell my home to pay for care?

Posted on 22 September 202120 March 2025 by Sophie Soraf

The Government’s proposed reforms to health and social care will still leave many people having to pay large amounts in care home fees. However, these costs can often be reduced or even avoided altogether with appropriate planning. This article looks at the rules in England; the rules in different parts of the UK may be different.

The government has announced proposals to change the rules around how much people have to contribute towards care costs and at what stage, funded by a proposed new Health and Social Care Levy.

What are the proposed changes to health and social care funding?

If you need local authority care, the means testing rules are applied to decide how much you must pay towards the care; currently the rules are as follows:

if your capital is above £23,250 (the “upper limit”) you have to pay the care fees in full
you do not have to make a capital contribution to care costs where your capital is less than £14,250 (the “lower limit”) – although you may still have to contribute from your income
between £14,250 and £23,250 you have to make a partial capital contribution (as well as an income contribution, where appropriate)
there is no cap on the maximum care costs you may have to pay over the course of your lifetime.

Under the new proposals:

the lower and upper limits will be increased to £20,000 and £100,000 respectively from October 2023. This means that anyone with capital of less than £100,000 may receive some support towards their care costs (albeit limited) and those with capital of less than £20,000 will not have to make a capital contribution (although may still have to make a contribution from their income)
a lifetime cap of £86,000 on care costs will be introduced from October 2023. This means that you should not have to contribute more than that amount towards your care costs (although the cap isn’t being backdated).

However, it’s important to note that the cap only applies to the cost of actual care and not to other costs such as accommodation, energy, food or water. These costs, particularly the costs of accommodation, can often far outweigh the costs of care, so many people will still face the prospect of very large care bills which will erode their families’ inheritance.

Will I lose my home if I need to pay for care?

The value of your home is included in the assessment of what capital you possess, for means testing in many circumstances. For example, it will be included in the assessment where you no longer occupy your home (e.g. if you are moving into residential care permanently) and none of the other exemptions applies. This may lead to your home having to be sold to fund care fees.

It may be possible to avoid selling your home during your lifetime by entering into a deferred payment arrangement (broadly whereby the fees are repaid from sale of the home after your death). However, interest and fees apply and such arrangements will still reduce your families’ inheritance.

Example where home inherited absolutely

John and Betty jointly own their home, worth £300,000, free of mortgage. They have owned it equally as joint tenants (see below) since acquiring it. The home is their only major asset. No-one else occupies it apart from them.

On John’s death in November 2023, his share in the home passes to Betty as the surviving joint tenant. Unfortunately, Betty’s health declines rapidly after John’s death and she has to move into permanent residential care 12 months later.

The entire value of the home will be included in the means assessment for Betty. Her capital will be above the £100,000 threshold, meaning that she will be liable to pay the fees in full without any local authority funding. The amount she has to pay for care will be capped at £86,000, however her other costs (e.g. accommodation, energy and food) will not be capped.

Can I avoid paying care home fees by making a lifetime gift?

Some people might consider giving their home away during their lifetime to try to get it outside the scope of the means testing rules. There are rules aimed at preventing people from doing this known as the “deprivation of assets” rules. Where these rules apply, the local authority can include the value of the gifted asset when they carry out the means assessment. The “deprivation of assets” rules are complex and specialist legal advice should always be taken on whether or not they will apply.

Those considering gifting their home must also consider the possible significant impact of the gift on their future financial security and independence. With careful drafting of the document, a trust can address some of these concerns. However, the deprivation of assets rules can still apply.

The tax consequences of a gift (whether outright or to trust) must also be carefully considered. Such a gift can in some circumstances trigger immediate tax charges and/or increase your future tax exposure and/or that of your estate. You should always take professional advice before deciding to give away your home or a share in it, both as to whether the gift will achieve the intended objectives and what the legal and tax consequences will be.

Can I use my Will to protect my home from being sold to pay care home fees?

For married couples who do not wish to give away their home, one alternative is to leave the share in the home of the first spouse to die, to an appropriately worded trust under their Wills. While this won’t offer full protection, it will, in many circumstances, significantly reduce (and sometimes eliminate) the exposure to means assessment. Meanwhile, provided the trust is worded appropriately, the survivor can continue to occupy the property for the remainder of their life.

For the trust to work, the couple will need to hold the property as “tenants in common”, rather than as “joint tenants”. Where joint owners hold a property as joint tenants this means that the share in the property of the first to die automatically passes to the survivor. If they hold the property as tenants in common, each joint owner’s share passes under their respective Wills. Where a property is owned as joint tenants, it’s simple for a legal specialist to convert this to a tenancy in common, but you need to get it organised before the first death.

Example where share of home left to appropriate Will trust

The facts are the same as in the previous example above, except that John and Betty convert their ownership of the property, so they hold it as “tenants in common” in equal shares and John leaves his half share in the home to a trust under his Will. Under the terms of the trust, Betty has the right to occupy the home rent free for the rest of her life and John’s half share passes to their children after Betty’s death.

When Betty goes into care, her assets for means assessment purposes will include her own share of the home, but not the share held in John’s Will trust (because that doesn’t belong to her). Hence the share in the Will trust will be protected for the children. Also, the value of Betty’s share of the home for means assessment, is likely to be significantly lower than 50% of the total property value, because it’s the market value of the share that is assessed. The market value of a half share is likely to be much lower than 50% of the whole value, because a half share on its own will be much less marketable.

The Will trust approach also avoids many of the potential downsides of a lifetime trust. The deprivation of assets rules will not generally apply assuming (as will often be the case) that there has been no reduction in the value of anyone’s estate. The trust can be worded in such a way that the inheritance tax and capital gains tax consequences will be broadly similar to those that would apply if the property had been left outright. However, careful drafting and implementation is needed, or the tax consequences could be different. Before the death of the first spouse to die, the trust has no effect, so you can deal with the property as you wish.

One relevant consideration is that, by using a Will trust, the survivor will not be entitled to the capital of the share of the first to die. This will deter people who want absolute control over the home after the first death. Ways to mitigate this include:

the trust can include powers to advance capital at the discretion of the trustees if desired
the survivor can be appointed as one of the trustees so that they are involved in decisions while they have capacity
the terms of the trust can also give the survivor the right to require the trustees to join in the sale and purchase of a replacement property if they wish to move.

Please be aware that the Will trust route will not provide protection if both spouses have to go into care during their joint lifetimes (because the trust does not apply until first death). However, if only one spouse has to go into care during their joint lifetimes, the home would not generally be taken into account for means assessment, provided the other spouse is still living there.

Can I use a Deed of Variation to protect my home from care home fees?

You may have heard that beneficiaries of a Will can vary the terms of the Will (or the destination of a property inherited as surviving joint tenant) within two years of death, by making a Deed of Variation. However, Deeds of Variation can be subject to the “deprivation of assets” rules. So, if you decide to change your Wills, it’s better to do so during your joint lifetimes rather than relying on Deeds of Variation.