Under the inheritance tax legislation each person has a nil rate band ie amount that they may give away without a charge to inheritance tax arising. The current nil rate band is £263,000. A husband and wife each have a nil rate band. Transfers between husband and wife are free of inheritance tax and ideally, to avoid a tax burden for the children or other beneficiaries when the second of them to die does so, they should make a gift of £263,000 to the children in the Will of the first to die. If the estates are insufficient to make a gift of this size and still provide for the surviving spouse (whose ongoing needs may be hard to assess at the time the Wills are made) then instead of an absolute gift to the children, the couple may elect to leave up to £263,000 to the trustees of their Wills to distribute at their discretion between such of the surviving spouse, the children, grandchildren and even in-laws as they choose. This is usually backed up by a letter stating that the needs of the surviving spouse are paramount and are to take priority over any tax planning considerations. The surviving spouse is a potential beneficiary as are the children and so on. The trustees can make the decision about how much (if anything) is passed to the children taking into account the widow/widower's needs.