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making a will and IHT avoidance advice please!

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  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    As I think I may have stated in my first post the house I live in at the moment is worth more than the threshold- its about 350k- and I have various peps,bomds from a few years ago that are probably worth in total 90k.I could spend it all and live life to the max now but I want to help my children out as best as I can


    I suggest you look into the rule which allows you to give away unlimited regular amounts of money IHT free as long as it comes from surplus income, and doesn't impact your lifestyle. (With gifts from capital you are limited to 3k a year IHT free).

    Note however that if you are taking "income" from an investment bond that this is actually a withdrawal of capital and thus wouldn;t qualify.

    But dividends from shares, savings account interest, spare pension income would be fine.
    Trying to keep it simple...;)
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    EdInvestor wrote: »
    I suggest you look into the rule which allows you to give away unlimited regular amounts of money IHT free as long as it comes from surplus income, and doesn't impact your lifestyle. (With gifts from capital you are limited to 3k a year IHT free).

    Note however that if you are taking "income" from an investment bond that this is actually a withdrawal of capital and thus wouldn;t qualify.

    But dividends from shares, savings account interest, spare pension income would be fine.

    But the OP said originally she knows all that, about the £3K a year she can give, and she also said 'they will probably squander it on God knows what!'

    It's possible that these 3 'children' know something of Mum's situation even if they don't know all the details, and following her 'health scare', have already got pound signs whizzing around in their eyes and are talking to their friends about how they don't need to save, don't need to stop wasting money on God knows what, because they have an inheritance coming to them.

    Or am I being unduly cynical, given that I've seen and heard so much of this from offspring of a wealthy parent (who probably never thought she'd be wealthy)?

    Me, I would make darned sure they never got a penny-piece.

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • gil13
    gil13 Posts: 297 Forumite
    Part of the Furniture Combo Breaker
    You should also consider giving away sums in the hope they qualify as PET's, if you survive more than 7 years after making the gift. Granted nobody knows how long we have or when God will call us home but for some it is convienient to look ahead and to start distributing assests early (whilst obviously making provisions for retirement for themselves).
  • margaretclare
    margaretclare Posts: 10,789 Forumite
    gil13 wrote: »
    Granted nobody knows how long we have or when God will call us home but for some it is convienient to look ahead and to start distributing assests early (whilst obviously making provisions for retirement for themselves).

    I agree with this. And I'm sorry that sav4it is 'getting a little cross' with me.

    Step back a little. I felt very sorry for the OP on reading her first post. I remember having a serious 'health scare' when I was in my 50s (shall I ever forget lying in the heart unit of a Saudi hospital and wondering if I'd even get home?) Reading between the lines, she comments on the value of property which has pushed her total assets far above what she could ever have imagined. That's the case with many people nowadays. OK. So far so good. And she's alone - no DH to bounce ideas off and discuss with, as I'm lucky enought to have. And then the comment 'they'll probably waste it on God knows what'. That really struck home with me. I see this kind of thing among younger people, their expectations, as of right, things that we never dreamed of. A 'gap year', for instance. I hasten to add, not all are alike. I've been very impressed, and pleasantly surprised, by my eldest GD. I've helped her because I know darned well she appreciates it, even if she's forgotten the words 'thank you' - 'cool, fantastic, much appreciated' are as close as she gets to a thanks. She doesn't waste a thing, and she wasn't too proud to start off with second-hand household goods. I would happily give her £3K a year but I wouldn't give a penny-piece to someone who 'would only squander it' as the OP says.

    I also think that there's a lot of living to do in your 50s. Some of us may survive a serious health scare, and there's a lot out there to see and do. The OP may yet fall in love all over again, as I did at 62, and remarry. The whole picture changes then.

    I have not said I 'don't trust' my family. Some of them have grown up a bit, have learned, have 'mellowed'. I still prefer not to put temptation in someone's way. DH and I were both professionals, and if we want a professional job done then we go to a professional to do it, which is what we did when we sorted out our EPAs recently. I would suggest that the OP does just that, goes to a professional who is experienced in this particular field, and go along with what he/she suggests.

    Margaret
    [FONT=Times New Roman, serif]Æ[/FONT]r ic wisdom funde, [FONT=Times New Roman, serif]æ[/FONT]r wear[FONT=Times New Roman, serif]ð[/FONT] ic eald.
    Before I found wisdom, I became old.
  • Errata
    Errata Posts: 38,230 Forumite
    10,000 Posts Combo Breaker
    Hello Mrs B - hope this helps. We all have our lightbulb moment when it comes to the wordly goods we'll be leaving behind and it comes at different times for different reasons for different people.
    £700 isn't a vast sum of money in the scheme of things, and what spending that with a solicitor will give you is sensible will drawn up after you've discussed all the ins and outs with the solicitor, fitted to your needs and wants and circumstances and more importantly - peace of mind.
    .................:)....I'm smiling because I have no idea what's going on ...:)
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