What does hotchpot mean?

In our family, if you cut the cake, everyone else chooses which slice they take! It’s a simple rule that encourages fairness and equality.

Hotchpot is also about fairness and equality.

What does the word hotchpot mean?

Hotchpot means a mixture of property.

Here’s an example clause you might find in a Will:

“My Trustees must bring into account and charge against the share of each of my children the amount of any gift or loan I make to that child in my lifetime. If any child of mine dies before me, the share of his or her children must be similarly charged.”

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A hotchpot clause refers to gifts and loans. It takes into account any money loaned or gifted to a beneficiary during the testator’s lifetime. The intention is usually to create fairness between the testator’s children. It treats any gift as an early advancement of their inheritance.

A hotchpot clause is not asking for the gift to be repaid to the testator’s estate. It simply recognises the gift or loan so that the beneficiary’s share in the estate can be adjusted. The end result is that all children receive the same benefit overall.

Let’s run through a practical example:

Dave wants to treat his two children equally and intends them to inherit 50/50 when he dies. Dave’s daughter Marney is a free spirit. She’s studying at university and planning to travel and work overseas. Marney’s older brother Michael is more conventional. He wants to buy a property, but he’s struggling to save enough for a deposit.

When Dave’s father dies, Dave inherits enough to repay his outstanding mortgage and has £7,000 left over. He considers what to do… if he gives each child £3500, Marney is likely to fritter her share away, and Michael still won’t have enough for his deposit. He decides to give Michael the £7000 and update his Will. He wants to be sure that Marney inherits £7,000 more than Michael when both her parents have passed away.

IMPORTANT: The testator must keep a separate record of any gifts or loans for a hotchpot clause to be effective. It must be kept up to date, and any repayments noted. The record must be easily located and ideally will be stored securely with the Will.

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Dave could leave a gift if £7000 in his Will to Marney, but it may be simpler and more cost effective to include a hotchpot clause. A hotchpot clause would mean that Dave doesn’t have to update his Will every time he makes a gift or loan to his children as part of their inheritance.

Hotchpot is different to hotchpotch, which means a confused mixture. You might say, for example, ‘the jumble table contained a hotchpotch of worn garments.’

Our top tip:

If you can't understand the terminology, layout, meaning or legal jargon in your Will, you should ask the legal practice that drafted it to give you an explanation in writing.

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Please note that information provided on the Carisma Wills website:

• Does not provide a complete or authoritative statement of the law;

• Does not constitute legal advice by Carisma Wills;

• Does not form part of any other advice, whether paid or free.