I saw a widow recently. She’d booked in to talk about inheritance tax, which is usually where these conversations start and almost never where they end.
Before we got anywhere near gifting or trusts or any of the clever stuff, we did the dull, necessary thing and read her will. It had been drafted only a few months earlier. And it was, I’m sorry to report, already wrong.
Not wrong in the legal sense. It was perfectly valid. It just quietly worked against almost everything she actually wanted.
Here is what it said. Four people would each receive a fixed sum. Ten more would each take a small percentage. The balance, after all that, would be split between three larger beneficiaries. And ten per cent of the estate would go to charity.
Eighteen beneficiaries. From a will a few months old.
None of that is unusual, and none of it is reckless. It’s the sort of will thousands of people sign every year, feeling sensibly organised as they do. The trouble only shows up when you start to plan.
Take the four fixed sums first. A fixed legacy is a curious thing. It looks generous and certain, but it does two unhelpful things at once. Year after year, inflation quietly eats it, so the amount you leave today buys rather less by the time it’s actually paid. And the moment you start giving money away in lifetime to reduce the estate, those same fixed sums swell as a share of what’s left: a bigger bite of a smaller pie than you ever intended.
The ten small-percentage beneficiaries have the opposite problem. Shrink the taxable estate through sensible planning, which is rather the point, and their slices shrink with it. Do the right thing for the tax and you quietly short-change the very people the will was meant to look after.
The three main beneficiaries would do well. But how well became almost impossible to say, because their share was simply whatever was left, and what was left depended entirely on which lifetime gifts we made, and to whom.
And then there were the executors. Eighteen beneficiaries, three competing formulas, fixed sums and percentages and residue all moving against each other. The executors, as it happened, were two of those main beneficiaries. They were being handed a part-time job. We tend to picture our will as our final word. We rarely picture the person who has to do the admin.
But the will, in the end, wasn’t the real discovery. It was a symptom.
Because as we worked down the list of smaller beneficiaries, something became obvious. These were people who could use the money now. Not in twenty years, not whenever the estate finally settled. Now. Help with a deposit, a grandchild’s fees, a debt cleared. And here is the part that made the whole thing click into place: she could comfortably afford to give it to them.
There’s an old line, credited to nobody in particular, that it’s better to give with a warm hand than a cold one. The cold hand is the will. The warm hand is now.
The patron saint of the warm hand is a man called Chuck Feeney. He co-founded the duty-free empire you’ve walked past in every airport, made several billion dollars, and then spent the back half of his life giving almost all of it away, quietly and on purpose. He called it Giving While Living. He owned no house and no car, wore a plastic watch, and set out to die with next to nothing. He more or less managed it. He died in 2023, in a rented flat, having given away more than eight billion dollars. Warren Buffett called him the model for the rest of us.
Most of us are not sitting on eight billion dollars. But the instinct scales down perfectly well to an ordinary large estate. Feeney’s point was never really about the size of the cheque. It was that money does more good when you’re alive to watch it work.
So the first thing we looked at, before any of the clever stuff, was giving in lifetime.
Done sensibly, and within what the current rules allow, it could reduce the inheritance tax due on her estate.[^1] It would simplify that baroque will down to something a human being could actually administer. And, most importantly, it would put money into the right hands at the moment it was needed, rather than years too late.
It would also do something the will could never do. It would let her be in the room. A cheque that arrives after you’ve gone is a kindness. A cheque that arrives while someone is struggling, handed over in person, is a conversation. Often a surprising one, occasionally a tearful one, sometimes with people she’d never have expected to be helping at all.
That part doesn’t appear anywhere on a tax calculation. It tends to be the part people remember.
Not everyone can do this, of course. Plenty of people need every penny of their capital to fund their own retirement, and giving away money you might later need is its own kind of mistake. If that’s the case, there’s a gentler version of the same idea: building a flexible trust into the will, rather than a fixed list of names and numbers. Done well, it hands a measure of discretion to people you trust, so the estate can flex to whatever the world looks like when you’re gone, instead of whatever it looked like on the afternoon you signed. It also spares you trooping back to the solicitor every time a grandchild arrives or a circumstance shifts.
Her will is being redrafted. It will be shorter, simpler, and a good deal warmer.
We help clients think through gifting, estate planning and the awkward arithmetic of generosity from our office in Hook, and across Hampshire, Surrey, Berkshire, Sussex and Kent. The tax matters, and we’ll always get the tax right. But the best moment of that meeting had nothing to do with tax. It was a woman realising she didn’t have to wait to be generous.
[^1]: Most outright gifts to individuals are “potentially exempt”: survive seven years and they fall outside your estate entirely, with some gifts, plus a modest annual allowance, exempt straight away. The detail matters and the rules change, so this is general information rather than advice, and individual circumstances will always differ.