Inheritance Tax Planning

John_Pierpoint

In my case dear old dad left an expensive house (nothing about sharing it with the little woman in those days) and some pretty large debts ("Why use your own money, when you can use someone else's" ).

Fortunately the remaining mortgage was covered by a mortgage protection policy.

He also had inherited a house that was let out - but 45 years ago, it was virtually impossible to get rid of a tenant, especially an elderly one.

So, with a stay at home wife, it was all potentially a nasty mess - but as you can see my sister and I have survived. Our mother died 8 years ago of old age.

One thing I have learned is that making sure that every one in your family is self reliant, rather than put your trust in financial instruments written in a fiat currency.

How old are the kids?

That said I would guestimate that the chances of you both dying within 15 years is in the range 500 - 1000 against it happening, so the premiums should be modest.

grey_gym_sock

given the extra info, especially ages of children, i think this makes a lot more sense (still very much a matter of opinion, of course). you generally need more financial protection in case of dying before your children are grown up. once they are grown up, they are more likely to gain financially from the death of their parents.

the insurance policies that seem like a really bad idea to me are the ones where you pay a premium for as long as you live, and they pay the IHT when you die. since the payout is a certainty, you (on average) pay more in premiums than you get back. generally, insurance makes more sense when it's a small premium to cover an unlikely event.