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What To Put In Your Will and Husband/Wife one dies give their half to children?

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tlf67482
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What To Put In Your Will and Husband/Wife one dies give their half to children?

#103025

Postby tlf67482 » December 9th, 2017, 7:21 pm

Does anyone know of a good source or could reply with a list of the type of things you should consider when drafting up a will?

I can think that what happens to money, jewellery, car, house and perhaps funeral desires needs to be included but is there anything else to think about?

One thing I am not too sure of is say husband dies and wife is living. Should the husband give his share of any house to the children when this happens? e.g. Wife continues to owns 50% and Child 1 and Child 2 both inherits 25% and just say Wife can live in house until death?

Can you say in will that the executers should give £X to this person and £X to this person to avoid solicitors/lawyers from charging for their time to do this?

Thanks

redsturgeon
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103034

Postby redsturgeon » December 9th, 2017, 8:27 pm

tlf67482 wrote:
One thing I am not too sure of is say husband dies and wife is living. Should the husband give his share of any house to the children when this happens? e.g. Wife continues to owns 50% and Child 1 and Child 2 both inherits 25% and just say Wife can live in house until death?

Thanks


We have just had new will written this week and that is exactly what we have done. You must own the property as tenants in common rather than as joint tenants though. Survivor can live in house until death but also can sell as long as the 50% share remains in trust for those inheriting.

John

dubre
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103038

Postby dubre » December 9th, 2017, 8:58 pm

Consider the situation where the "children" could have marital problems and where a possible ex daughter/son-in-law might/will expect a share of the worth of the property.

redsturgeon
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103041

Postby redsturgeon » December 9th, 2017, 9:19 pm

dubre wrote:Consider the situation where the "children" could have marital problems and where a possible ex daughter/son-in-law might/will expect a share of the worth of the property.


Absolutely, in our will money goes straight to children, not spouses and if the children predecease and have children of their own then their share passes straight to any grandchildren.

John

supremetwo
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103053

Postby supremetwo » December 9th, 2017, 10:54 pm

redsturgeon wrote:
dubre wrote:Consider the situation where the "children" could have marital problems and where a possible ex daughter/son-in-law might/will expect a share of the worth of the property.

Absolutely, in our will money goes straight to children, not spouses and if the children predecease and have children of their own then their share passes straight to any grandchildren.John

But if money that goes to a child becomes part of a divorce settlement, there can be no guarantee that all of it will pass to grandchildren.

Or have you set up a trust to cover that aspect?

And to the OP, a trust is not something to write yourself, so seek out legal advice preferably from a STEP member:-
https://www.step.org/about-us

https://www.step.org/advice-information
About trusts Trusts Explained

Trusts explained gives an overview of how trusts work and what they are most commonly used for, and corrects some of the widespread misconceptions held about trusts.

https://www.step.org/sites/default/files/Comms/leaflets/Trusts_Explained_2016.pdf (PDF 2.3MB)

redsturgeon
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103055

Postby redsturgeon » December 9th, 2017, 11:12 pm

supremetwo wrote:
redsturgeon wrote:
dubre wrote:Consider the situation where the "children" could have marital problems and where a possible ex daughter/son-in-law might/will expect a share of the worth of the property.

Absolutely, in our will money goes straight to children, not spouses and if the children predecease and have children of their own then their share passes straight to any grandchildren.John

But if money that goes to a child becomes part of a divorce settlement, there can be no guarantee that all of it will pass to grandchildren.

Or have you set up a trust to cover that aspect?

And to the OP, a trust is not something to write yourself, so seek out legal advice preferably from a STEP member:-
https://www.step.org/about-us

https://www.step.org/advice-information
About trusts Trusts Explained

Trusts explained gives an overview of how trusts work and what they are most commonly used for, and corrects some of the widespread misconceptions held about trusts.

https://www.step.org/sites/default/files/Comms/leaflets/Trusts_Explained_2016.pdf (PDF 2.3MB)


Yes it is via a trust.

John

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103084

Postby Dod101 » December 10th, 2017, 7:50 am

Why would you want to pass 50% of the marital home to the children on the first death anyway? A trust costs money to set up and then maintain. and there will be the complication of ownership issues every time the survivor wants to do something (including moving)

Presumably this is intended to save on IHT but these days there are I think other ways to that and of course the free band arising from home ownership if the house is going to the next generation helps in this regard. Personally I am in just that position and would not like to be sitting in my house owning only 50% of it, with the other half effectively owned by my children. Not sure they would want that either.

These ideas are fine on paper but not sure that in practice they are necessarily for the best. Think before you act would be my advice.

Dod

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103094

Postby redsturgeon » December 10th, 2017, 9:41 am

Dod101 wrote:Why would you want to pass 50% of the marital home to the children on the first death anyway? A trust costs money to set up and then maintain. and there will be the complication of ownership issues every time the survivor wants to do something (including moving)

Presumably this is intended to save on IHT but these days there are I think other ways to that and of course the free band arising from home ownership if the house is going to the next generation helps in this regard. Personally I am in just that position and would not like to be sitting in my house owning only 50% of it, with the other half effectively owned by my children. Not sure they would want that either.

These ideas are fine on paper but not sure that in practice they are necessarily for the best. Think before you act would be my advice.

Dod


Setting aside the issue of IHT let us imagine the following hypothetical situation.

Two married people A and B each have a child from a previous marriage, lets say A1 and B1. Both children spend most of their time with previous partners, so A has little connection or parental relationship with B1 and B has little connection or parental relationship with A1.

A and B have a child between them C1.

The wishes of A are that their estate should pass 50% to A1 and 50% to C1

The wishes of B are that their estate should pass 50% to B1 and 50% to C1.

90% of the wealth of A and B is tied up in a house jointly owned by the two of them 50/50.

A dies. In a situation where of A's estate passes 100% to B on death then it would be easy for B to decide to leave the estate on their death to B1 and C1 effectively leaving A1 with nothing.

Holding A's 50% share of the house in trust while allowing B to live there solves that issue in that A1's inheritance is safeguarded.

There are few costs or complications to this arrangement. Can you suggest an alternative way to ensure A's wishes are respected on their death?

I would suggest you speak to a solicitor to ensure that any such arrangement is drawn up correctly though.

John

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103099

Postby Dod101 » December 10th, 2017, 10:00 am

With respect redsturgeon is now drawing up a specific set of circumstances where it just be that his solution (50% going to the children on the first death), may have merit. That is not at all the scene which was painted by the OP (although of course it may be the case).

What I think the thread shows is that there is no general solution and it depends very much on the individual family circumstances, but automatically leaving 50% of the family home to the children on the first death is not automatically a good idea for many reasons.

As it happens I too have a stepchild as well as two children from my first marriage so I have some experience and understanding of what he is saying.

Dod

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103103

Postby scrumpyjack » December 10th, 2017, 10:10 am

It absolutely depends on individual circumstances but assuming there is inheritance tax payable and the surviving spouse has ample to live on and everyone trusts everyone (lot of 'ifs'!), the most efficient thing to do is leave the IHT nil rate band to the children and everything else to the surviving spouse. The surviving spouse then gives the children whatever amount the deceased wished the children to have had IHT not been payable. This may avoid all IHT if the surviving spouse lives 7 years and if they don't you can't be worse of tax wise.

But every circumstance is different and you can only plan what is sensible in your family circumstances and with your knowledge of the personalities and individual needs.

Also don't forget that it may be better to leave the pension to the children rather than the spouse if the spouse would still have the desired financial resources without it.

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103105

Postby DrBunsenHoneydew » December 10th, 2017, 10:14 am

In redsturgeon's scenario: "A" should give child A1 a cash amount of the IHT limit £325k in their will (or beforehand) if they have it. If they don't, perhaps they could leave a goodly sum using a life assurance policy (which could be outside the estate) if they can afford premiums but can't give it as a lump sum.
Giving people fractions of houses is profoundly unsatisfactory.
You need to do something to get your money to your children in case your spouse remarries and dies before their new partner, who gets the lot. And you need to do it on your own death in case your spouse omits to make proper arrangements themselves (as their will would be void on remarriage).
Last edited by DrBunsenHoneydew on December 10th, 2017, 10:18 am, edited 1 time in total.

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103111

Postby genou » December 10th, 2017, 10:17 am

scrumpyjack wrote:It absolutely depends on individual circumstances but assuming there is inheritance tax payable and the surviving spouse has ample to live on and everyone trusts everyone (lot of 'ifs'!), the most efficient thing to do is leave the IHT nil rate band to the children and everything else to the surviving spouse. The surviving spouse then gives the children whatever amount the deceased wished the children to have had IHT not been payable. This may avoid all IHT if the surviving spouse lives 7 years and if they don't you can't be worse of tax wise.

But every circumstance is different and you can only plan what is sensible in your family circumstances and with your knowledge of the personalities and individual needs.

Also don't forget that it may be better to leave the pension to the children rather than the spouse if the spouse would still have the desired financial resources without it.


Nope. You've potentially thrown away the first spouse's NRB. Leave all to surviving spouse and then they make gifts to children. If they live 7 years, the gifts drop out and there are still two NRBs left. If they don't survive 7 years, you are no worse off. Complicated IHT planning isn't really an online activity

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103112

Postby redsturgeon » December 10th, 2017, 10:17 am

Dod101 wrote:With respect redsturgeon is now drawing up a specific set of circumstances where it just be that his solution (50% going to the children on the first death), may have merit. That is not at all the scene which was painted by the OP (although of course it may be the case).

What I think the thread shows is that there is no general solution and it depends very much on the individual family circumstances, but automatically leaving 50% of the family home to the children on the first death is not automatically a good idea for many reasons.

As it happens I too have a stepchild as well as two children from my first marriage so I have some experience and understanding of what he is saying.

Dod


To be fair, I was answering the general point raised by you ( although you may have been aiming that question specifically at the OP)

Why would you want to pass 50% of the marital home to the children on the first death anyway?


But in the OP that is exactly the question he raises.

And I would absolutely agree with you that individual circumstances vary and professional advice should be taken based on those individual circumstances.

Hypothetically here is another situation where you might want to think about passing your 50% in trust to your children.

A and B have a child C.

A dies, their estate passes to B

B remarries X

B dies, all money passes to X.

Original child C is then cut out of will, X walks off with everything.

John

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103113

Postby redsturgeon » December 10th, 2017, 10:22 am

DrBunsenHoneydew wrote:In redsturgeon's scenario: "A" should give child A1 a cash amount of the IHT limit £325k in their will (or beforehand) if they have it. If they don't, perhaps they could leave a goodly sum using a life assurance policy (which could be outside the estate) if they can afford premiums but can't give it as a lump sum.
Giving people fractions of houses is profoundly unsatisfactory.
You need to do something to get your money to your children in case your spouse remarries and dies before their new partner, who gets the lot. And you need to do it on your own death in case your spouse omits to make proper arrangements themselves (as their will would be void on remarriage).


There are many people who have a large proportion of their estate tied up in a family home and no piles of spare cash of a remotely similar size, so in that case who do you "do something to get your money to your children in case your spouse remarries and dies before their new partner, who gets the lot"

Can you tell me why you think, "Giving people fractions of houses is profoundly unsatisfactory"



John

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103131

Postby scrumpyjack » December 10th, 2017, 11:06 am

genou wrote:
scrumpyjack wrote:It absolutely depends on individual circumstances but assuming there is inheritance tax payable and the surviving spouse has ample to live on and everyone trusts everyone (lot of 'ifs'!), the most efficient thing to do is leave the IHT nil rate band to the children and everything else to the surviving spouse. The surviving spouse then gives the children whatever amount the deceased wished the children to have had IHT not been payable. This may avoid all IHT if the surviving spouse lives 7 years and if they don't you can't be worse of tax wise.

But every circumstance is different and you can only plan what is sensible in your family circumstances and with your knowledge of the personalities and individual needs.

Also don't forget that it may be better to leave the pension to the children rather than the spouse if the spouse would still have the desired financial resources without it.


Nope. You've potentially thrown away the first spouse's NRB. Leave all to surviving spouse and then they make gifts to children. If they live 7 years, the gifts drop out and there are still two NRBs left. If they don't survive 7 years, you are no worse off. Complicated IHT planning isn't really an online activity


Nope, I said after giving the nil rate band to the children (ie the first spouse leaves their nil rate band directly to the children). As you say it isn't really an online activity, but the point about leaving assets direct to the children after paying 40% IHT, versus leaving them to the spouse who then gives them to the children with NO IHT is a very valid one which is usually ignored by commentators.

tlf67482
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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103271

Postby tlf67482 » December 10th, 2017, 9:45 pm

Thanks for the discussion.

Agree it is complicated and a professional is probably the way to go but I want a better understanding of how things work beforehand.

Say if husband dies and wife lives but at some point in the future needs long term care can the "council" claim anything the husband leaves in the will to the children? If husbands leaves his share of the house to the children would this better protect from the "council" forcing the sale of house or claiming the half passed down by husband etc?

If an adult child still lives with us can we protect from the house being sold and leaving adult child homeless? e.g. husband dies he leaves his share to two children but wife and child remain in house unless everyone agrees to sell. Wife dies and children end up with previous husband share and new wife share but adult child can remain unless they want to sell?

Thanks

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103796

Postby Clitheroekid » December 12th, 2017, 10:59 pm

tlf67482 wrote:Does anyone know of a good source or could reply with a list of the type of things you should consider when drafting up a will?

I can think that what happens to money, jewellery, car, house and perhaps funeral desires needs to be included but is there anything else to think about?

There are lots of things to consider when making a Will, which is why anyone doing so should obtain advice from a qualified professional. Because Wills are seen as loss leaders the advice is relatively cheap compared to its value.

One important decision is who to appoint as executors. If all the beneficiaries are adults and the estate is straightforward you can generally just appoint the main beneficiaries, normally the surviving spouse and/or the children. However, if there will be minor beneficiaries the executors will also have to act as trustees, overseeing their inheritances until they come of age. This can be quite an onerous job, and some potential executors would not want to take it on, particularly if they aren't main beneficiaries themselves.

It's fairly unusual to be specific about things like cars, as they are normally just part of the general estate. A common mistake in home made Wills is to leave a specific asset, such as "I leave my Ferrari to Fred" only for a disappointed Fred to discover that the Ferrari was sold a year before death and replaced with a Lamborghini (which, of course, he doesn't inherit).

Unfortunately I've even seen this in the case of a house - "I leave my house at 10 Downing Street to Jeremy" but then the testator moves to a different house and forgets to make a fresh Will.

In any event, it's quite unusual to deal with the house in the Will. The vast majority of houses owned by married couples are owned as joint tenants, so that the house automatically passes to the survivor irrespective of what the Will says.

And I would never advise a client to include funeral instructions in the Will. I recall all too vividly when I was a trainee solicitor (or articled clerk as we were called in those dim and distant days) being asked to read a Will to the family of a wealthy client who'd died. The second clause expressed how they wanted to be buried in a specific location - just as the ashes from the crematorium were drifting overhead! I needed to do some swift `editing' but ever since I've reminded clients that it's not unusual for the Will to be read after the funeral.

One thing I am not too sure of is say husband dies and wife is living. Should the husband give his share of any house to the children when this happens? e.g. Wife continues to owns 50% and Child 1 and Child 2 both inherits 25% and just say Wife can live in house until death?

Although there may well be cases, such as those mentioned in the thread, where this is a sensible option I would not generally advise it, particularly if there are no children from previous marriages. Splitting ownership between the surviving spouse and children is often problematic, and I've seen all too many cases where quite nasty arguments have arisen. These can be both relatively petty ones about who should pay for repairs and improvements and very serious ones about trying to force a sale. It's a sad fact of life that parents and children don’t always get on and a relationship which seems good at the time the Will is made can very easily turn sour years later.

There are also the "3D" risks of death, debt and divorce. A child who's a part owner of the parental home may die (who inherits their share in the house?) be made bankrupt (so the creditors want to force a sale to get their share) or get divorced (so the ex-spouse wants to force a sale). All three are remarkably common, and often when they're least expected.

Finally, there’s also the potentially very important loss of the capital gains tax exemption on half the value of the house. Whilst the surviving spouse continues to enjoy this the children won't, and this can often mean an otherwise avoidable tax bill of tens of thousands of pounds when the house is sold.

Can you say in will that the executers should give £X to this person and £X to this person to avoid solicitors/lawyers from charging for their time to do this?

Yes, these are just ordinary legacies. The executors don't need to involve solicitors at all if they don't want to, and can simply administer the estate themselves.

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Re: What To Put In Your Will and Husband/Wife one dies give their half to children?

#103859

Postby dubre » December 13th, 2017, 10:30 am

www.aprilking.co.uk

see gifts with reservation

My wife and I have agonised over these matters because we are well aware that,after the first death, it is common for some action/lack of action to result in the children being excluded from the estate.

We have come to the conclusion that "gifting whilst we live" offers a solution which we can both agree on.However this can also bring its problems.(but not gifting property that you are living in)


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