Shares and Credit Card debts

SuperSeagull

My father has a few shares probably less than £5k that he wants sold when he passes away and the money given to his 4 grandchildren. He also has credit card debts of £25k that he is paying to various credit card companys at a very reduced rate with no interest being added, but obviously as he is 75 years old he will never live long enough to pay them all off. When he passes away will these shares go to his estate and the credit card companys be able to take the money to offset some of their debts. I have suggested that he either transfers the shares during his lifetime to one or more of his grandchildren or sells them and gives the children the money to overcome this problem. Is this sound advice or is there better advice that I can give him.

NickX

Very complicated situtation here.

Yes should your father pass away, the shares will become part of his estate and as such the Card Providers can make a claim upon the estate prior to any inheritance being paid to his beneficiaries.

However, I think there are issues with giving the shares away prior to his death. I think he would have to live another 7 years at least before such a gift becomes free of taxation. There may also be a limit of £3k worth of gifts to each person per annum. I am not 100% sure on these rules so I would advice making some enquiries with probate specialists.

dzug1

He can give the money or the shares away now without fear of inheritance tax - it only applies if his estate is over £300K (or whatever the limit is at the time of his death). Given the size of his debt this looks highly unlikely.

SuperSeagull

Thanks for the replies as another angle could he transfer the shares to either myself or my sister for us to dispose of as and when the market rises and we deem is the best time to sell.

SuperSeagull

Anybody with any other views

CLAPTON

other views ?
based on the limited information you have given:

what you seem (I emphasise seem ) to be proposing is to defraud the CC creditors out of their cash on his death:
but I think that selling or transferrring ownership of the shares would successfully avoid shares forming part of his estate.