Will clarification

lavalamp

I am in total agreement that professional advice is needed here - that is not in doubt. I am just calling upon the folks of this forum who may have some words of wisdom to ensure she makes the most of the time with the solicitor as theoretica says.

TBagpuss

If there is a trust then the trust would normally be a legal entity in its own right and would pay income tax. The trust can be drawn to make clear that the net income (i.e. after tax, and expenses such as maintenance on the house) is payable to the husband. The solicitor will be able to advise on the appropriate wording - your relative may need to think about making sure that the trustees can use rent to build up a reserve fund, first, before they start paying out the income to the husband, for instnace, so that you (or whoever is named as trustee) isn't put in a position of having to pay for things up front and then claim back from the trust - particuarly in relation to upkeep, insurnace etc during any viod period.

The trustees would need to be aware of their responsibilities as landlords and willing to take that on.

It may well be worth considering whether there are other options. Leaving the husband a % of the value, or a fixed lump sum, would be much simpler and would give you more flexibility as you would then be able to either sell the property to provide that lump sum, or buy his share from the estate, or agree with him at that time to rent it out as joint landlords and to split the expenses, and the profit, in proportion to your respective shares in the house.

Of she is not supporting him now, why do they feel it is appropriate for her to (potentially) support him after her death? Are there reciprocal arrangemetns in place for her to benefit under his will if he is the first to die?

A formal divorce or judicial separation might also be an option - this could enable them to have a financial settlement now - this would also have the advantage that hif he had any charge or interest in the hosue as part of a divorce settlement that would ake precedence over any claim for Care fees, as it would be a disposition for value, not at an undervalue or deprivation of assets.

lavalamp

TBagpuss wrote: »

Of she is not supporting him now, why do they feel it is appropriate for her to (potentially) support him after her death? Are there reciprocal arrangemetns in place for her to benefit under his will if he is the first to die?

A formal divorce or judicial separation might also be an option - this could enable them to have a financial settlement now - this would also have the advantage that hif he had any charge or interest in the hosue as part of a divorce settlement that would ake precedence over any claim for Care fees, as it would be a disposition for value, not at an undervalue or deprivation of assets.

I have no idea as to the answer to your first question here. I think she just wanted to leave him the house as he's her 'friend'. He just doesn't want to own another property (he has his own house). However, she insists he have something, so that is what was decided on between them! Who knows what goes through the minds of some people

There is no interest in a formal divorce - neither sees any value in that when everything is amicable. They have no children - he doesn't have anyone but her to leave his estate to either he says.

I wasn't expecting to inherit, as her existing, long standing will leaves everything but some personal items to him. I was the executor and the beneficiary of some personal items only. She recently had a scare and was very seriously ill - it has prompted discussions between her and her 'husband' about the will and the fact that they are both getting on in age.

euronorris

There are two parts to this:


The Will, which will essentially setup a trust where the separated husband has a lifetime interest in the income, and you would be the remainderman (ie, you only get access to the capital upon his death), and


The taxation of the trust, once in effect.


The first part requires the input of a solicitor, preferably a member of STEP who can advise her adequately.


The second will require a financial adviser. Information from them can be sought now, in a more general sense, if that is required in order to assist her in making the decision that suits her needs best.


Is there any reason why the house could not be sold upon her death with the proceeds paid into an income producing portfolio? That way, maintenance of the property is negated and the risk of empty periods is also negated. It also offers more flexibility in terms of the capital value of the asset.


If she, and he, are both getting on and health is a concern then she might want to consider putting an LPA in place (as might her separated husband). Pretty much everyone should have one, as we are all able to become incapacitated at anytime, by a car accident (for example), but it is even more possible.


I'd also suggest that seeing a financial adviser now might be wise if she is already considering the possibility of requiring care in the near future.

lavalamp

euronorris wrote: »

There are two parts to this:
Is there any reason why the house could not be sold upon her death with the proceeds paid into an income producing portfolio? That way, maintenance of the property is negated and the risk of empty periods is also negated. It also offers more flexibility in terms of the capital value of the asset.

This may seem strange, but she is very attached to the house - it's her pride and joy and retains a lot of original Victorian features. I think she feels it would be a pity for us not to enjoy that as well! She has some 'interesting' ideas sometimes

It may be that her husband is in agreement for it to be sold and I guess that can happen upon death - I assume a will doesn't force anyone not to sell?

euronorris

lavalamp wrote: »

This may seem strange, but she is very attached to the house - it's her pride and joy and retains a lot of original Victorian features. I think she feels it would be a pity for us not to enjoy that as well! She has some 'interesting' ideas sometimes

It may be that her husband is in agreement for it to be sold and I guess that can happen upon death - I assume a will doesn't force anyone not to sell?

It really depends how it's worded in the will. If she specifically dictates that it is rented out, and not sold until his death, then this is what must happen. There are a few things that cannot be put in wills, but it is a short list, such as you can't have a contingency that encourages divorce. ie, I bequest £XX to my daughter, should she no longer be married to XX at the time of my death. <--- Not allowed as it encourages divorce. You are, however, allowed to encourage marriage lol


It might be worth pointing out that, insisting the property is maintained and rented out means that a) neither of you will actually be 'enjoying' the property and b) she's actually, unintentionally, leaving you with a quite a big responsibility.


She could also word it so that the property can only be sold if he is in agreement with it.

Mojisola

lavalamp wrote: »

This may seem strange, but she is very attached to the house - it's her pride and joy and retains a lot of original Victorian features. I think she feels it would be a pity for us not to enjoy that as well!

euronorris wrote: »

It might be worth pointing out that, insisting the property is maintained and rented out means that a) neither of you will actually be 'enjoying' the property and b) she's actually, unintentionally, leaving you with a quite a big responsibility.

I'd second this. This house could become a big problem for you.

Your life could change - wanting to move away, reduced income or ill health and you would still be responsible for finding the time and money to maintain a rented-out Victorian property.

One of my relatives bought the family home off the rest of her siblings because of sentimental attachment to it and it's become a real problem for her. For a while, it was used as a holiday home but now her husband is ill and it's just a worry and an expense.