WillsHotchpot

3 November 2017by WillPack2
https://www.willpack.co.uk/wp-content/uploads/2017/10/Hotchpot-1280x720.jpg

For parents who have more than one child, it may be necessary during their lifetime to make monetary advances to help a particular child or children but not all at that time. For example; the purchase of a house or to help clear a debt problem. The advancement can be either be made as a gift or a loan.

Upon the death of the parents, in most cases they would wish for all of the children to have benefitted the same so that there is no unfairness felt between the children.

The above can be achieved simply by the inclusion of a ‘Hotchpot’ clause within the Will. Whether the advancement was made either as a gift or a loan is irrelevant because the clause will work in the same way.

The Hotchpot clause relies on the testator keeping a record outside of the Will of any gifts made and in the terms of a loan, a loan agreement between both parties should put in place. It must be kept up to date and noted if any repayments have been made during lifetime. The record must be easily located, ideally kept with the Will as this is the document which the Executors will use.

In the majority of Wills, where there is more than one child, the residue of the estate is usually left to the children on equal shares. However, with the inclusion of the Hotchpot clause, this can still be case but the Executors must take into account any gifts or loans which have been made during lifetime. The amount of the advancement made to a particular child is then taken into account when calculating their share upon the distribution of the residuary estate, thereby equalising the estate.

2 comments

  • Michael Taylor

    19 January 2020 at 12:28 pm

    My mother died in 2017, her Will made in 1975 included the words “there shall be no obligation to bring into hotchpot any advances or gifts already at the date hereof”. Does this mean that any advances of cash do not have to be returned to the estate or was this nullified by the Law Reform Act 1995 and money has to be paid back to the estate?

    Reply

    • WillPack

      19 January 2020 at 12:34 pm

      Unfortunately, we are only insured to provide advice to our partners. If you require any advice we would recommend contacting the Society of Will Writers on [email protected] or 01522 687888 who will be able to put you in contact with a will writer local to you.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Contact Us

OFFICE
Chancery House
Whisby Way
Lincoln
LN6 3LQ
PHONE
01522 697007

WillPack© Trust Wills & Probate Limited t/a WillPack. All rights reserved.
Registered office: Eclipse House, Whisby Way, Lincoln, LN6 3LQ.
Registered in England and Wales No. 06540022.
Registered with the ICO (Data Protection) No. Z1992110.