Bloodline Wills – what are they and do I need one?

Bloodline Wills

The term ‘Bloodline Will’ is not a legal term – it has been coined to describe a Will that contains various trusts that attempt to keep assets in the family bloodline.

Before making the Will

Before making a Bloodline Will, couples will ensure they hold their family home as ‘Tenants in Common‘. This means that each person owns a defined share of the house (say, 50%) and can leave it to whomever they like in their Will.

Once this has been achieved, each will make a Will that leaves the other a ‘life interest’ in their share of the family home.

Life interest

Leaving your spouse or civil partner a ‘life interest’ means that they will have use of your share of the property for life. They can even sell the property and buy a suitable alternative, if they want to. Your share is protected throughout and once they die, it will be inherited by your choice of beneficiaries – the children for example.

Anna and Rachel are married with one child, Lucy. They own a property that is currently worth £200,000 as ‘Tenants in Common’. This means that each owns a 50% share of the property (so each of their shares is currently worth £100,000).They make Wills leaving each other a life interest in their respective shares, with the remainder going to Lucy.

Anna dies first. Rachel can now use Anna’s share of the property for life. After Rachel dies, both Anna’s share and her own share will pass to Lucy.

This first part of the Bloodline Will provides an extremely important protective measure. In the above example, if Rachel remarries, gets into debt or goes into care, her own share is at risk, but Anna’s share is safe for their child, Lucy.

This may be contrasted to a typical Will arrangement which leaves ‘everything to each other, then the children’. If the survivor remarries, their new spouse is first in line to inherit! Even if the survivor makes a Will specifying that their child should benefit, it is open to their spouse to challenge this under the Inheritance (Provision for Family and Dependants) Act 1975.


By using a life interest, you have protected your share of the family home from threats such as the survivor needing care, falling into debt or remarrying. But what happens when your children inherit? They too can lose the inheritance to such threats. Consequently, your hard-earned assets may be wasted so that your grandchildren don’t see a penny.

The risk of this can be mitigated with trusts. A trust is a way of managing assets such as property, cash and investments. It will have trustees who manage the assets and beneficiaries. There are several different types of trust.

Bloodline Wills typically include discretionary trusts. With these type of trusts, no single beneficiary is absolutely entitled to any of the assets. The trustees can pay out the assets to the beneficiaries as and when they see fit. If one of the beneficiaries gets into financial trouble, their creditors cannot take the trust assets, since they don’t own them outright. Similarly, if the beneficiary goes through a divorce, the Court may choose to ignore the assets (although the Court has complete discretion to take any factor into consideration when considering the finances of a divorcing party).

Are Bloodline Wills a good idea?

In short, the typical structure of a Bloodline Will is likely to be beneficial for some but unsuitable for others. It all depends on your assets and family circumstances.

Certainly, the ‘life interest’ aspect of the Bloodline Will is a good idea for most people. It protects a very valuable share of the family home from a whole range of threats, ensuring that the children always receive something.

The second part of a Bloodline Will – the discretionary trust – may seem like a good idea at first glance, but they are not the right solution for everybody. They may incur a tax charge every time property leaves the trust (unless it is loaned). In addition, they may incur a charge on every 10 year anniversary following the death of the Deceased. This is not always the case – it depends on a range of factors, such as whether any nil rate band is still available.

A further disadvantage of discretionary trusts is that they limit the use of the Residence Nil Rate Band. For smaller estates (i.e. where a couple’s total estate is under the £650,000 nil rate band) this does not matter since they will not need this allowance. However, larger estates that might otherwise benefit, will lose the allowance if the property passes into such a trust (although very large estates won’t get the allowance anyway because of tapering). Whilst it is possible to ‘appoint out’ a share of the property within two years of death to take advantage of the allowance, this is unlikely to apply for any share of the property that was first gifted as a ‘life interest’ (see above).

Whilst a discretionary trust might not be right for some, it will be exactly the right solution for others. Estate planning involves a range of factors besides tax. One of your children might be in a precarious marriage that is likely to end in divorce. Another might have a gambling habit or poor money management skills. Leaving your hard-earned assets to them direct could result in them being squandered away. Consider also that such problems may not exist at the time you write your Will but could develop down the line. A discretionary trust allows for changes in circumstances. A modest Inheritance Tax bill might be preferable to losing the entire sum to a divorce settlement.

On the point of divorce, some discretionary trusts are drafted so that the beneficiary is both the sole trustee and sole adult beneficiary (perhaps with their minor children included as potential beneficiaries). Whilst a court might ignore funds in a discretionary trust when calculating each party’s assets in a divorce settlement (and indeed, chose to do so in Daga v Bangur in 2018), they equally might not. Neil Denny, a solicitor at Roythornes, notes of the Daga case:

This is not to say that the courts will not make orders against beneficiaries of discretionary trusts if they are satisfied that it is more likely than not that the beneficiary in question has access to the resources within the trust, either immediately or in the foreseeable future. Cases involving assets held within discretionary trusts are, generally, very fact specific and outcomes can, therefore, vary widely from case to case. They are also influenced by the fact that trustees exist for the benefit of their beneficiaries, so that reasonable requests for financial assistance by a discretionary beneficiary will often be considered sympathetically, unless there are compelling reasons why financial assistance is not appropriate, or possible.

Note that a discretionary trust would not be valid at all if the beneficiary was both the sole trustee and sole beneficiary, since they would be absolutely entitled to the assets.

A final point to make is that the protection offered by the first part of the Bloodline Will – the ‘life interest’ – does not need to be paired with a discretionary trust. There are other types of trusts to consider, including a range of possibilities for children and grandchildren. An experienced estate planning solicitor will always look to provide a bespoke, rather than a ‘one-size-fits-all’, solution where tax is not the only consideration.

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