Bloodline Planning is a phrase we use often, and it deserves a straightforward explanation. At its heart, it is a way of arranging your estate so that what you pass on remains with your descendants, and is not diverted by a surviving spouse's remarriage, a beneficiary's divorce, a creditor claim, or an unnecessary future Inheritance Tax charge.
The mechanism
The primary tool is a family Trust, drafted in your lifetime or arising on your death through your Will. Assets placed into the Trust are held for the benefit of your children and grandchildren, but are not owned outright by any of them. A Trust can protect and hold assets in this way for up to 125 years.
What it protects against
On first death, Trusts can prevent a surviving spouse's remarriage redirecting assets, and can help keep the family home outside a care-fee assessment. On second death, at beneficiary level, they help prevent generational Inheritance Tax, and shield inheritances from divorce settlements, creditors, bankruptcy and future care fees.
What it does not restrict
A well-drafted Bloodline Trust is not a straitjacket. Beneficiaries can use, live in and benefit from the assets held in Trust, guided by a letter of wishes that reflects your intentions. The Trust is simply a protective wrapper, the underlying wealth still supports the family.
Who it suits
Families with children from more than one relationship, business owners, families with property, and anyone who has taken the time to build something and would prefer that time to matter for their descendants.