IHT planning

sebastianj

Dear all, looking for some help to whether a married couple need to write a Will or not.

They are joint owners 50/50, is this the right thing to have?
Price of the property is about 500K, is there an IHT applicable ?
Do they need a will to transfer the property to the other on first death?
They have 3 grown up children, how does one benefit them most?

thanx,
sebastian

DavidHayton

sebastianj wrote: »

Dear all, looking for some help to whether a married couple need to write a Will or not. sebastian

Everyone should write a will. Even if your affairs are simple and straightforward. A simple will should not cost very much and even if it merely mirrors the intestacy rules, it will mean that your successors will have an easier time sorting out your affairs. David

CLAPTON

sebastianj wrote: »

Dear all, looking for some help to whether a married couple need to write a Will or not.

They are joint owners 50/50, is this the right thing to have?
Price of the property is about 500K, is there an IHT applicable ?
Do they need a will to transfer the property to the other on first death?
They have 3 grown up children, how does one benefit them most?

thanx,
sebastian

without a will then upon the first death the estate will be divided according to the intestancy laws... do they conform with your wishes?
if so good if not then bad


what do you mean joint owners ... tenants in common or joint tenants?

olbas_oil

>>They are joint owners 50/50

If all assets are jointly owned then there will be no estate on the first death. The survivor will continue to own the house, savings etc.
If the intention is not to pass on assets at this stage, then the absense of a will doesn't matter, in terms of inheritance.
On the partner's death, when the assets do form part of the estate for probate, the first unused nil rate band can be added the second, giving (now) £650k exemption. When the second partner dies, a will is of great importance, to make it clear how the assets should be distributed.
You should also consider the other purposes of a will. To express wishes about individual items, charitable donations, instructions for funeral, appointment of executors etc.
For absolute clarity, it may be best to have two wills done now.

macman

I can't get my head round why someone who's property assets alone (plus presumaby others) are in excess of half a million quid, would be unwiling to spend £100 or so making a simple will?

CLAPTON

olbas_oil wrote: »

>>They are joint owners 50/50

If all assets are jointly owned then there will be no estate on the first death. The survivor will continue to own the house, savings etc.
If the intention is not to pass on assets at this stage, then the absense of a will doesn't matter, in terms of inheritance.
On the partner's death, when the assets do form part of the estate for probate, the first unused nil rate band can be added the second, giving (now) £650k exemption. When the second partner dies, a will is of great importance, to make it clear how the assets should be distributed.
You should also consider the other purposes of a will. To express wishes about individual items, charitable donations, instructions for funeral, appointment of executors etc.
For absolute clarity, it may be best to have two wills done now.

you are either joint owners or you are 50/50
you can't be both

the OP is confused

dunstonh

They are joint owners 50/50, is this the right thing to have?
Price of the property is about 500K, is there an IHT applicable ?
Do they need a will to transfer the property to the other on first death?
They have 3 grown up children, how does one benefit them most?

Just for the moment, ignoring the confusion from the op on ownership and assuming joint ownership is what is meant and there is nothing that is split 50/50 legally.... (e.g. joint accounts, joint tenancy on house etc).

So, on that basis, if the husband died, the wife would not get the full estate. So, a Will would be vital if the wishes are for the spouse to receive everything.

macman

Joint tenants or tenants in kind?

olbas_oil

dunstonh wrote: »

Just for the moment, ignoring the confusion from the op on ownership and assuming joint ownership is what is meant and there is nothing that is split 50/50 legally.... (e.g. joint accounts, joint tenancy on house etc).

So, on that basis, if the husband died, the wife would not get the full estate. So, a Will would be vital if the wishes are for the spouse to receive everything.

It is confusing. Dealing with the assets separately:
Money in joint accounts

The deceased person may have held money with another person in a joint bank or building society account. Normally this means that the surviving joint owner automatically owns the money. The money does not form part of the deceased person's estate for the purpose of administration and therefore does not need to be dealt with by the executor or administrator. However, a deceased's person's share in joint property is treated as part of their estate for inheritance tax purposes, both on death and on gifts made during their lifetime.
http://www.direct.gov.uk/en/Governmentcitizensandrights/Death/Preparation/DG_10029468


Jointly owned property

If the deceased person owned property with another person or persons as 'beneficial joint tenants', the deceased person's share automatically passes to the surviving joint owner(s). Property owned as joint tenants does not form part of a deceased person's estate on death, but the value of the deceased person's share of jointly owned property is included when calculating the value of the estate for inheritance tax purposes.
In other cases, where the deceased person owned property with another person or persons, the deceased person's share of the property forms part of their estate. It is dealt with by the executor under the terms of the will or by the administrator under the law of intestacy. Administration of the estate is likely to be complex and seeking independent legal advice is recommended.

So assuming that the property is owned as 'joint tenants' & the savings are in a standard joint account, there may be nothing in the estate on the first death, and a double nil rate band available on the second.

Pennywise

A will is essential. It's too easy to say that the estate will pass to the survivor on first death. What about if the survivor remarries - that could mean the children get nothing and the estate goes to the new spouse - is that really what the OP wants to happen?

Surely the OP wants his estate to ultimately divide up between his 3 children? If that's the case, then he needs a will to make that happen, i.e. life interest to surviving spouse and estate passing to children on second death.

Also, does he want all three children to share equally - what about any special assets he may want to give a particular child?

I really can't understand why people don't make a will - I've been at the sharp end when wills havn't been made and it's not a pretty sight.