When should beneficiaries receive a gift?
- Minors (children under 18) cannot hold property in their own right, although in some circumstances their parents or guardians can accept gifts on their behalf.
- For significant gifts, it might be advisable to add an “age contingency” meaning that the beneficiary has to attain a certain age before inheriting.
- Avoid trying to attach binding conditions as to the use of gifts. Your wishes could generate unintended disputes and may not be practical when the time comes. If you are concerned as to the misuse of significant sums, a discretionary trust may be the better solution.
First and second death gifts
If you are in a relationship and have created a pair of “mirror Wills” in the same terms, leaving everything to each other and then to children or other beneficiaries, then you can decide whether to leave gifts to others if you are the first, or the second, to die.
- First death gifts will be taxable and will count towards your £325,000 nil rate band, leaving less to carry over to your spouse or civil partner’s estate.
- Making a first death gift ensures that the gift reaches its intended recipient – many Wills leave everything to the surviving spouse, registered civil partner or cohabitee and there is no guarantee that they will then respect your ultimate wishes.
- First death gifts might “double-up” if you and your spouse or partner both make them to the same individual – check this is your intention.
- “Second death gifts” may never come to pass if you fail to survive your partner or spouse.