Disposal of assets to Spouse

Cardew wrote: »

Can I seek advice on the following please.

A friend’s wife (in her 70’s) has a terminal illness with weeks/months to live. She has been happily married for 40+ years – with adult children. Both have recently made out wills(through solicitor) leaving everything to the surviving spouse, who will be the executor.

The reason for the new wills was because their old wills had a Trust arrangement(for surviving spouse and children) to ensure they received double the IHT allowance. This is not now necessary and a Trust would prevent the new arrangement for IHT exemption that comes into force next month i.e. if proceeds of house go to children, the allowance is £850k(rising to £1 million).

Her older husband is not very good on financial matters and is distraught about his wife’s illness. She has asked me, in confidence, to find out the implications of transferring most of her assets to her husband before she dies.

Her assets are:

Joint ownership with husband(no mortgage) of a house worth around £700k.

£100k in cash ISAs. £40k in Premium Bonds. £10k in 65+ National Savings Bond, £25k in savings and shares worth around £35k.

The only reason I have been asked for advice is that I pointed out the new arrangement for IHT introduced in April. That apparently makes me an expert – which I ain’t; or I wouldn’t seek advice on MSE.

The intent is that their solicitor will handle probate.

[FONT=&quot]A. [/FONT]I have told her that as far as I am aware, leaving aside the house, there is no restriction in passing assets between husband and wife. The ISA’s and Premium Bonds would have to be cashed in before transfer. The effect of this would simply reduce the size of her estate for probate and reduce solicitor’s charges.

[FONT=&quot]B. [/FONT]I have no idea on transfer of property! Cost implications etc


Advice please.

greenbee wrote: »

Having just gone through this (my dad died in November, and I'm just about to complete probate with everything going to my mum), I agree that the children should be included as executors.

The estate does not look particularly complicated, and with everything going to the surviving spouse, the children may prefer to deal with it themselves. Solicitors will charge an hourly rate (I was quoted 15 hours @ £200/hour), plus disbursements (fees, the cost of an accountant to complete the IHT paperwork) and many also charge a percentage of the value of the estate (I was quoted 1.5% which in this case would be j£8.5k...).

Bearing in mind that there is a lot in the probate forms that only family can fill in (e.g. blood/half blood relatives), it may actually be easier for the children to complete these themselves.

I'd advise whoever is registering the death to get plenty of certificates (I got 10 I think) and also to get a solicitor to certify a few copies of the will (some places need them), and to use the 'Tell us once' service. Contact with the institutions holding the investments doesn't need to happen immediately (in fact most will need a copy of the sealed grant of probate, although NS&I don't appear to even though their website says they do). Sadly there are no standard processes or paperwork and many of them are pretty poor at managing the process if they don't have a dedicated bereavement team.

My dad's estate wasn't dissimilar (although he's managed to do quite a good job of spending some of his investments once he got his diagnosis!), and it certainly took me less than the 15 hours that the solicitor estimated - including completing the IHT paperwork.

Cardew wrote: »

Thanks for the advice in posts above.

Whilst the children are very close(not geographically!) and supportive of both parents, the lady does not want the children to be executors, they will be on the death of her husband.

The wife is very practical and has prepared a complete list of all her assets, which will be £210k plus share of the house(say £350k).

If her share of the house is included, at 1.5% + VAT? that would mean an £8.4k bill - £10k with VAT. Her object in seeking advice, on the feasibility of disposal of assets, was to reduce that liability.

The husband has indicated to me that any money he gets from his wife will be gifted immediately to his children and hopes he will live at least 3 years, and preferably 7 years.