How to pass assets to current wife and children from previous marriage

[richfool]

Then that's life. The trust might need sufficient funds to pay for professional trustees, who will not be cheap. I repeat my point about running costs and capital costs - who will pay what , and crucially who will have the money to do so. If that is sorted out, the need for trustees to actually do anything should be minimal up to the point where they organise a sale.

I think it worth avoiding a lawyer being involved on a long term basis is it can be avoided.

Perhaps you could make the trustees your wife and the two children, so on your death the house is registered in their names and can't be sold without all agreeing to it, and your wife continues to live in it. The children would have no administration to do.

IANAL but I seem to recall family situations like this where the wife carried on living in the house for her life and the house then went to the children. There were no tax returns or accounts of any sort as the 'trust' had no income or expenses.

Thank you both very much for your input and comments.

Thoughts that arise:-

I am wondering does the Will document itself constitute the trust (document)? If so, would it be viable/practical/preferable to use the solicitors as Executors - (but not trustees), i.e. for them to deal with probate and any initial legal formalities AND to transfer the property into either: (1) the names of my wife and two children as the Trustees and (ultimate) beneficiaries of the trust; or (2), (as I think you are suggesting), to transfer the property directly into the names of my wife and two children (as tenants-in-common) (not as trustees?)? In the latter scenario, could I rely on the wording in the Will to convey/maintain the proviso that my wife can continue to live in the property for as long as she wishes, (i.e. to protect her from being pressurised into selling by my children)?

Whilst I acknowledge that fees would be incurred for dealing with probate etc, could taking either of those courses of action, then avoid the solicitors being involved and incurring fees on an ongoing basis?

Understood that my wife and children could organise the sale themselves at the appropriate point in time (and instruct a solicitor to act in connection with the sale). In my experience, solicitors will normally offer competitive quotes to act in connection with a house sale or purchase, thus I see the bigger risk cost-wise would be from solicitors carrying out some ongoing monitoring or maintenance of a trust role, which the above suggestions should avoid. Also presumably I should be able to better negotiate a price for them to handle the initial executor work.

Certainly the Will establishes the Trust and no further Trust Deed is needed. The Will can set out these arrangements and name your wife and the two children as the trustees of the property and set out their rights. There should not be any need for solicitors to be involved further in this.

That sounds promising. Can you give me a little more guidance/detail on how that would work in practice. Currently I've already made a Will, with the solicitors named as Executors and Trustees, along the lines outlined in my OP, relevant extracts:

My liquid assets, (ISA's, investments, savings etc), I would wish to be split between all (wife and adult children), immediately after my demise (subject to probate etc), in predetermined proportions, - i.e. without waiting for the eventual disposal of the property.
I want to leave the property, which is owned in my sole name, for my wife to live in for as long as she wants, or until she either remarries, or returns to her home country to live, or until she passes away if sooner. Upon its sale, I would want the proceeds to be split between my wife, if she is still alive, and my adult children from my first marriage, in predetermined proportions of my choosing.

So currently the Will names the solicitors as both executors and trustees.

Noting that one of my children lives (permanently) in Australia and neither my wife or daughter would be capable of obtaining probate, or carrying out any complex legal work, would it be appropriate to change the Will to make my wife and two children the trustees (and beneficiaries), but keep the solicitors as Executors (only)? Thus the solicitors would carry out the work on the estate and ensure the property was held correctly, and then their work would finish. My wife and two children would then be responsible for ensuring the property was properly maintained, and at some future point for arranging the sale and instructing solicitors to act in connection with the sale, at that time.

[scrumpyjack]

I am not a solicitor but having been an executor 3 times I do know that the Will is the document that sets up the Will Trust and no further documents are needed. The solicitor you deal with will be able to prepare it to give effect to your wishes. I can't advise you beyond that.

[richfool]

I am not a solicitor but having been an executor 3 times I do know that the Will is the document that sets up the Will Trust and no further documents are needed. The solicitor you deal with will be able to prepare it to give effect to your wishes. I can't advise you beyond that.

OK, thanks for your help and advice. With the points/information gained from yourself and genou, I will need to have a further discussion with my solicitor, to see how and where I go from here.

[PaulBullet]

Richfool

If the solicitor is named in the will as the executor or the trustee then it is difficult to get them off the gravy train.

If they are not named then the executor/beneficiaries can employ a professional to do the work.

I would not name a professional in the will, however i would write a letter to my executor/Beneficiaries saying something like

"don't feel the need to do anything or everything yourself, I have always found X of Y solicitors to be easy to deal with and if you need help I would certainly get a quote from them"

Just my 2p

[richfool]

I am not a solicitor but having been an executor 3 times I do know that the Will is the document that sets up the Will Trust and no further documents are needed. The solicitor you deal with will be able to prepare it to give effect to your wishes. I can't advise you beyond that.

Richfool

If the solicitor is named in the will as the executor or the trustee then it is difficult to get them off the gravy train.

If they are not named then the executor/beneficiaries can employ a professional to do the work.

I would not name a professional in the will, however i would write a letter to my executor/Beneficiaries saying something like

"don't feel the need to do anything or everything yourself, I have always found X of Y solicitors to be easy to deal with and if you need help I would certainly get a quote from them"

Just my 2p

I've just had another thought, which I would welcome views upon:

What if I transfer the ownership of the property into joint names with my wife (now), but hold it as "tenants in common", split say 60/40 (60% held by me and 40% held by my wife. Then in my Will bequeath my 60% share to my adult children (split between them 50/50). Then upon passing my wife continues to hold her 40% share and is able to continue to live in the property, and my children inherit the 60% share between them. It would then be up to them to sell as and when my wife and children agreed to do so. The only potential hiccough I could envisage would be if children wanted to sell straight away and my wife didn't.

A solicitor could handle the transfers and normal sale at agreed costs, without there needing to be an ongoing trust (or "gravy train"!)

[genou]

I've just had another thought, which I would welcome views upon:

What if I transfer the ownership of the property into joint names with my wife (now), but hold it as "tenants in common", split say 60/40 (60% held by me and 40% held by my wife. Then in my Will bequeath my 60% share to my adult children (split between them 50/50). Then upon passing my wife continues to hold her 40% share and is able to continue to live in the property, and my children inherit the 60% share between them. It would then be up to them to sell as and when my wife and children agreed to do so. The only potential hiccough I could envisage would be if children wanted to sell straight away and my wife didn't.

A solicitor could handle the transfers and normal sale at agreed costs, without there needing to be an ongoing trust (or "gravy train"!)

This works, sort of. It means your children will be exposed to CGT on any eventual sale. I think it exposes them to additional stamp duty should they move their own residence while the house is still owned, which won't bother the non-UK one, but may be a deal breaker for the other. As you say, if one of your children goes rogue, bust or has a bad divorce settlement, your wife can lose the house as a place to live even if she gets to keep her share of its value.

[Chrysalis]

It also gives your wife no security over her home, which will be majority owned by your children, who could force a sale. How well does she get on with them?
On the other hand, it does give a clear and simple solution, which gives it quite some merit. An even simpler solution would be to abandon entirely the idea that your wife will stay on in the house after your death.
Or, would it be possible to downsize to a property you could leave entirely to your wife, and gift or bequeath the children th3 rest, or the majority of, the other assets? Or rejig the inheritance so your wife gets the house and the children the other assets?
I think the best solution depends on exactly what you’re aiming to achieve, and what the priorities are between competing objectives of providing for your wife and gifting to your children, and how much each of them needs (or how much you think is appropriate to leave them). Maybe taking a step back and thinking through the ideal outcome will help you see the solution.
In my view, an arrangement that deals properly with all assets once, via the immediate distribution of the estate, is much preferable to a complicated long running arrangement involving trusts or shared ownership of property. Particularly if the children aren’t especially close to your wife.
And it goes without saying that whatever solution you come up with should be communicated to all concerned. This will greatly help your nearest and dearest when they have to deal with administering your estate. There should be no surprises. You may even find that discussing your ideas with all concerned might produce solutions you hadn’t thought of (for example, your children may have preferences about whether or not they would want to sell the property).

[richfool]

It also gives your wife no security over her home, which will be majority owned by your children, who could force a sale. How well does she get on with them?
On the other hand, it does give a clear and simple solution, which gives it quite some merit. An even simpler solution would be to abandon entirely the idea that your wife will stay on in the house after your death.
Or, would it be possible to downsize to a property you could leave entirely to your wife, and gift or bequeath the children th3 rest, or the majority of, the other assets? Or rejig the inheritance so your wife gets the house and the children the other assets?
I think the best solution depends on exactly what you’re aiming to achieve, and what the priorities are between competing objectives of providing for your wife and gifting to your children, and how much each of them needs (or how much you think is appropriate to leave them). Maybe taking a step back and thinking through the ideal outcome will help you see the solution.
In my view, an arrangement that deals properly with all assets once, via the immediate distribution of the estate, is much preferable to a complicated long running arrangement involving trusts or shared ownership of property. Particularly if the children aren’t especially close to your wife.
And it goes without saying that whatever solution you come up with should be communicated to all concerned. This will greatly help your nearest and dearest when they have to deal with administering your estate. There should be no surprises. You may even find that discussing your ideas with all concerned might produce solutions you hadn’t thought of (for example, your children may have preferences about whether or not they would want to sell the property).

This works, sort of. It means your children will be exposed to CGT on any eventual sale. I think it exposes them to additional stamp duty should they move their own residence while the house is still owned, which won't bother the non-UK one, but may be a deal breaker for the other. As you say, if one of your children goes rogue, bust or has a bad divorce settlement, your wife can lose the house as a place to live even if she gets to keep her share of its value.

Genou, Thanks for your thoughts and comments. The implications of my children actually being part owners of the property noted. I take it that if the property is held in trust as originally planned, that protects each of the beneficiaries from claims from others on their assets, or the CGT and stamp duty implications of them owning more than one property that you refer to?

Chrysalis, Thanks very much for the thoughts and comments.

Firstly, would your first point be significantly affected, if my wife's share of the property was, for example, 50% or 60%? I.e. so that she held the largest percentage of the property? Would that enable her to avoid being forced into a sale situation if she didn't want to sell? Though I am now disinclined to take that route for the reasons Genou identified above.

Currently, the Will is set up to distribute liquid assets and cash between all three, at the appropriate points in time, so all get something early on and again later when the property is sold.

The point occurs to me that even with a trust in place, if my wife chose to sell and go fairly soon after my demise, then the "gravy train" would be quite short, as the trustees role would end once the property was sold and proceeds distributed.

Your other points noted. I am in fact currently discussing the situation with my wife and children, though one offspring lives in Australia and the other is tending to avoid the complexities of the situation!

[scrumpyjack]

One other point - all your planning is on the basis that you go first. I have several times seen situations where the spouse that died first was not the one expected to!

[genou]

Genou, Thanks for your thoughts and comments. The implications of my children actually being part owners of the property noted. I take it that if the property is held in trust as originally planned, that protects each of the beneficiaries from claims from others on their assets, or the CGT and stamp duty implications of them owning more than one property that you refer to?

If the property is in trust with your wife as the only eligible occupant, the additional stamp duty issue goes away. I'm not sure that the existence of the trust is a 100% lock out, but I can't envisage circumstances where it could be terminated if your wife wanted to remain resident. Since the trust and your testament will be the same document, your lawyers can advise on that. Equally, they should be able to ensure that PPR exemption is available on the sale of the house, so that no CGT is payable. That means selling the house when your wife leaves it, but that's the plan AIUI.

You will pay for your will, and normally your will states that your assets fund the execution of that will .If you appoint your wife and your UK resident child as executors/ trustees, then they can hire the lawyers to actually do the work when ( hopefully long hence ) the need arises. The point is that they have the right to hire and fire the lawyers. Once the will is executed, there really shouldn't be that much to do unless and until the house is sold, assuming the house is the only asset in the trust. You just have to, as I said, have clear plans in place for who is going to pay for what while the trust persists. I see no reason why there should be a gravy train, as there is no work to do unless the trustees ask for something to be done.

[pompeygazza]

rather than splitting your liquid assets evenly, it would be much easier if you put a figure (ie £10k or more if you have it) to be given to each of your children upon your death and then what is left over will go to your wife. It'll make life sooo much easier for the executor.

[richfool]

rather than splitting your liquid assets evenly, it would be much easier if you put a figure (ie £10k or more if you have it) to be given to each of your children upon your death and then what is left over will go to your wife. It'll make life sooo much easier for the executor.

Ah, OK, good point. I presume you mean, because that would avoid the Executor having to assemble and finalise all the liquid assets in order to determine the correct split, if it was done in percentage terms?

[Lanark]

In David Bowie's will he left 50% to his wife and 50% split amongst his children, that seems a very simple, equitable and elegant way to split things, though no doubt made easier because his total net worth would be far in excess of any one house.

It leaves his wife with the autonomy to decide her own will, you can't predict the future and in 10 or 20 years time she may want to include other people.

[Lanark]

rather than splitting your liquid assets evenly, it would be much easier if you put a figure (ie £10k or more if you have it) to be given to each of your children upon your death and then what is left over will go to your wife. It'll make life sooo much easier for the executor.

The problem with that approach is that such a will can go out of date quickly, what if the assets fall below a level that will give everyone their £10K each? or what if they increase tenfold?

[richfool]

In David Bowie's will he left 50% to his wife and 50% split amongst his children, that seems a very simple, equitable and elegant way to split things, though no doubt made easier because his total net worth would be far in excess of any one house.

It leaves his wife with the autonomy to decide her own will, you can't predict the future and in 10 or 20 years time she may want to include other people.

Maybe David Bowie had more than one property and could thus leave one to each person. The issue in my situation is that I only have one property and I want to provide a home for my wife to continue to live in, but I also want to split my assets between 3 people including my wife (wife plus 2 children), thus I can't sell her home from underneath her. I also can't be sure in advance, how much my liquid assets/investments will amount to at that point in time.

In the light of previous input on the thread, I have been pondering whether I should make my wife the (sole) Executor (executrix), and advise her to then instruct a solicitor to deal with probate and matters relating to the title of the property that may be beyond her, and later the sale of the property, as and when that arises. In that way she rather than the solicitor would be controlling events. (Or appoint her Executor with a backup in case she doesn't survive me).

[Clitheroekid]

I've been meaning to throw in my two penn'orth, but every time I was going to do so a new point arose, so I thought it'd be best to go back to your basic questions.

Is this an appropriate way to deal with one's estate when you want to provide for your new (younger) wife and also leave an inheritance to each of your adult children from a previous marriage?

I want to leave the property, which is owned in my sole name, for my wife to live in for as long as she wants, or until she either remarries, or returns to her home country to live, or until she passes away if sooner. Upon its sale, I would want the proceeds to be split between my wife, if she is still alive, and my adult children from my first marriage, in pre-determined proportions of my choosing.

My liquid assets, (ISA's, investments, savings etc), I would wish to be split between all (wife and adult children), immediately after my demise (subject to probate etc), in the same predetermined proportions, - i.e. without waiting for the eventual disposal of the property.

Is it reasonable to approach the situation in that way. I don't really want to leave the distribution of all the assets until the property is sold, as if my wife lived on in the property for the rest of her life that could mean my adult children would have to wait a long time to inherit anything. By distributing the liquid assets at the earlier point, my wife would then also have some funds to support her, either in the UK, or if she decided to return/retire back to her own country, to support her there. And my(adult) children would get something sooner, rather than later as well.

The first thing to say is that if life interests can be avoided they should be. In my 30+ years of experience they are very often a source of problems and conflict, sometimes quite serious. On many occasions they have become so difficult to manage that they are wound up, with the life tenant taking a lump sum to surrender their (almost invariably her) life interest.

It's not difficult to see why this is the case, as there is a baked in conflict of interests between the life tenant, who wants to maximise her use of the property at minimum cost, and the remaindermen (the beneficiaries when the life tenant's interest expires) who want her to bu**er off as soon as possible, and in the meantime to incur minimum expense.

There’s also the sheer unpredictability of a life interest, that might last a few days or a few decades, during which time any number of unpredicted events might happen that, had the testator foreseen them, would have persuaded him to make different provisions.

One problem that’s very common is the condition whereby the widow loses her life interest if she remarries. For many - perhaps most - contemporary women marriage is no longer seen as being of any great importance per se, so if it means she's going to lose a very valuable right she'll just cohabit.

Of course, most life interest trusts try to cover this by extending the condition to say "or if she cohabits for a period exceeding six months" or some such, but this is a real minefield. What does cohabitation actually mean? Does it have to be a sexual relationship, and how do you prove it one way or t'other? It can all too easily end up with the remaindermen paying private detectives to find evidence, just like the old days of proving adultery, and becoming potentially ruinous for family relationships.

So unless there’s an extremely cogent reason for creating a life interest don't do it.

In any case, why is it so important that your wife should retain the right to live in the house? Have you actually discussed it with her, as she may not want to do so? Particularly as there are no children it wouldn't be a family home, and she may well want to downsize, but unless the Will specifically allows for that (which creates still more problems) she may end up stuck in a house she doesn't want to live in simply because she can't afford not to live there.

I would think your best strategy by far is to divide everything at the time of your death. The family situation generally, and the respective needs of your wife and children are at least predictable at that point, and if, for example, you left half to her and half to your children it would be simple and everyone would know just where they stood. Assuming neither side was unduly miffed with the size of their share (and 50/50 would seem inherently fair) the relationship between your wife and your children would probably remain good, and if she chose to go her own way thereafter then at least it's all settled.

Such an arrangement would also be much easier to administer than a life interest trust, and there would accordingly be no real need for professional involvement. Whilst solicitors might be called in to assist with the paperwork it would be a much smaller task than dealing with a trust, and the cost would be commensurately less.

Furthermore, it would be quite feasible to appoint your wife and children as the executors, as there would be no need for ongoing trustees.

Finally, be wary of leaving your wife too little. She has legal rights to inherit a reasonable proportion of your estate, and if you treat her unfairly the estate will face a claim from her with even more conflict and expense.

[Lootman]

Finally, be wary of leaving your wife too little. She has legal rights to inherit a reasonable proportion of your estate, and if you treat her unfairly the estate will face a claim from her with even more conflict and expense.

I was aware that under French and Scottish law that leaving children or spouses nothing can be effectively challeged.

But I thought that in the UK and the US it was an absolute right to exclude spouses and children from one's estate if one so chooses.

After all, whilst one is alive one can give anything to anyone, as far as I know.

[Clitheroekid]

I was aware that under French and Scottish law that leaving children or spouses nothing can be effectively challeged.

But I thought that in the UK and the US it was an absolute right to exclude spouses and children from one's estate if one so chooses.

No, the Inheritance (Provision for Family and Dependants) Act 1975 puts quite stringent limits on testamentary freedom.

More here (no endorsement of the firm) - https://wedlakebell.com/disputing-an-in ... -act-1975/

[Lootman]

I was aware that under French and Scottish law that leaving children or spouses nothing can be effectively challeged.

But I thought that in the UK and the US it was an absolute right to exclude spouses and children from one's estate if one so chooses.

No, the Inheritance (Provision for Family and Dependants) Act 1975 puts quite stringent limits on testamentary freedom.

More here (no endorsement of the firm) - https://wedlakebell.com/disputing-an-in ... -act-1975/

I can understand that in cases where the deprived recipient would then require state welfare benefits.

But otherwise I fail to see the purpose of this provision (not that that matters of course).

My Will leaves everything to my wife and children and I cannot imagine it any other way. But if I could imagine it another way I like to think I could enact that via probate, without giving everything away to others before I die which is the obvious and effective alternative.

[richfool]

I've been meaning to throw in my two penn'orth, but every time I was going to do so a new point arose, so I thought it'd be best to go back to your basic questions.

Is this an appropriate way to deal with one's estate when you want to provide for your new (younger) wife and also leave an inheritance to each of your adult children from a previous marriage?

I want to leave the property, which is owned in my sole name, for my wife to live in for as long as she wants, or until she either remarries, or returns to her home country to live, or until she passes away if sooner. Upon its sale, I would want the proceeds to be split between my wife, if she is still alive, and my adult children from my first marriage, in pre-determined proportions of my choosing.

My liquid assets, (ISA's, investments, savings etc), I would wish to be split between all (wife and adult children), immediately after my demise (subject to probate etc), in the same predetermined proportions, - i.e. without waiting for the eventual disposal of the property.

Is it reasonable to approach the situation in that way. I don't really want to leave the distribution of all the assets until the property is sold, as if my wife lived on in the property for the rest of her life that could mean my adult children would have to wait a long time to inherit anything. By distributing the liquid assets at the earlier point, my wife would then also have some funds to support her, either in the UK, or if she decided to return/retire back to her own country, to support her there. And my(adult) children would get something sooner, rather than later as well.

The first thing to say is that if life interests can be avoided they should be. In my 30+ years of experience they are very often a source of problems and conflict, sometimes quite serious. On many occasions they have become so difficult to manage that they are wound up, with the life tenant taking a lump sum to surrender their (almost invariably her) life interest.

It's not difficult to see why this is the case, as there is a baked in conflict of interests between the life tenant, who wants to maximise her use of the property at minimum cost, and the remaindermen (the beneficiaries when the life tenant's interest expires) who want her to bu**er off as soon as possible, and in the meantime to incur minimum expense.

There’s also the sheer unpredictability of a life interest, that might last a few days or a few decades, during which time any number of unpredicted events might happen that, had the testator foreseen them, would have persuaded him to make different provisions.

One problem that’s very common is the condition whereby the widow loses her life interest if she remarries. For many - perhaps most - contemporary women marriage is no longer seen as being of any great importance per se, so if it means she's going to lose a very valuable right she'll just cohabit.

Of course, most life interest trusts try to cover this by extending the condition to say "or if she cohabits for a period exceeding six months" or some such, but this is a real minefield. What does cohabitation actually mean? Does it have to be a sexual relationship, and how do you prove it one way or t'other? It can all too easily end up with the remaindermen paying private detectives to find evidence, just like the old days of proving adultery, and becoming potentially ruinous for family relationships.

So unless there’s an extremely cogent reason for creating a life interest don't do it.

In any case, why is it so important that your wife should retain the right to live in the house? Have you actually discussed it with her, as she may not want to do so? Particularly as there are no children it wouldn't be a family home, and she may well want to downsize, but unless the Will specifically allows for that (which creates still more problems) she may end up stuck in a house she doesn't want to live in simply because she can't afford not to live there.

I would think your best strategy by far is to divide everything at the time of your death. The family situation generally, and the respective needs of your wife and children are at least predictable at that point, and if, for example, you left half to her and half to your children it would be simple and everyone would know just where they stood. Assuming neither side was unduly miffed with the size of their share (and 50/50 would seem inherently fair) the relationship between your wife and your children would probably remain good, and if she chose to go her own way thereafter then at least it's all settled.

Such an arrangement would also be much easier to administer than a life interest trust, and there would accordingly be no real need for professional involvement. Whilst solicitors might be called in to assist with the paperwork it would be a much smaller task than dealing with a trust, and the cost would be commensurately less.

Furthermore, it would be quite feasible to appoint your wife and children as the executors, as there would be no need for ongoing trustees.

Finally, be wary of leaving your wife too little. She has legal rights to inherit a reasonable proportion of your estate, and if you treat her unfairly the estate will face a claim from her with even more conflict and expense.

Thank you Clitheroe kid, for your input.

Your analysis and recommendations started off well with sound reasons why a life time interest/trust was less desirable. However, unfortunately, you haven't picked up on some of the points I brought up along the way (in the thread).

Those factors were: that I do very much want to provide for my wife which includes wanting to provide her with somewhere to (continue to) live, and I don't want her to be in a position where she might come under pressure from my adult children to move out of her home, sell up and go. Though note, that said, currently, she thinks she will want to (sell up) and go back to her home country, but I don't want to put her under pressure or force her to do that. I think she will want to, but I don't want to box her into a corner, as she may change her mind or at least she may wish or need to stay on a couple more years to wind things up before making that step (returning to her home country to live/retire).

Thus re your assertion that "the best strategy by far is to divide everything at the time of your death", becomes a question/problem of how do I split the estate which includes the property that my wife is living in at that time, without pushing her out or putting her under pressure to leave (even though she may well want to leave)?

Note that because of the amounts involved, - i.e. the property currently being worth a lot more than my liquid assets/investments and the uncertainty of how those values will change in the future, it makes bequeathing the property to my wife and my liquid assets to my children, or vice versa, an unknown or potentially uneven split. If I passed the property in its entirety to my wife, she would get much more than my (2) children and she would have no liquid funds/minimal income to help support her. Conversely, if I pass the property to my 2 children and my liquid assets to my wife, - then, firstly I couldn't be sure how much of those liquid assets would be left at that future point in time, and secondly, that would require my wife to vacate the property and return home without any discretion or flexibility, in order for my children to sell the property and get their hands on the "cash". Noted as mentioned above, that my wife may well wish to leave the UK and return to her home country to live, and thus that strategy could fit well.