For anyone planning what will happen to their assets when they pass away one of the last things they want is for a beneficiary to lose any benefit immediately. This can happen, for example, if the beneficiary has an IVA, (Individual Voluntary Arrangement) in place at the time of inheriting. Their inheritance would go to pay off the debts, rather than follow the deceased’s wishes.
Our advice to our client in this case was that a Trust would be the best protection for their Estate. When our client passed away, as Trustees we gave their daughter the option of having their IVA paid off from their Inheritance or protecting the funds for them for the future. They chose the latter as they were able to comfortably manage their current monthly payments. While they made these payments, we were able to buy them a car, television, lawnmower, washing machine, tumble dryer, and even replaced some fencing from their inheritance without it affecting their IVA.
Once they had cleared their IVA, we were then able to pass on the residue of the Estate to her in one final payment. This way our client’s Estate was protected for their daughter, who was able to inherit when ready.
Comments