Where/who best for proceeds of an estate to go?

getmore4less

johnD17 wrote: »

thanks - makes sense.


I thought that a DOV is only worthwhile in keeping assets tied up long term?


Estate is 345-365k.

Is there a house

You can probably get the current estate IHT free.

DoV are a tax reduction vehicle, no need for long time.

One issue is life interests can be a problem.

Brighty

Will states personal belongings to your mum

House they lived/live in (or your dads share of it) to you, held in trust, with a lifetime interest for your mum, so she can carry on living there till she pops her clogs. Was the house jointly owned by your mum and dad? If so, how was it owned? Joint tenants or tenants in common? If tenants in common, then as above, if joint tenants then this section is irrelevent and the whole house now belongs to mum.

The rest of his estate, cash, savings, any other properties, goes to your mum, held in trust. There is no mention whatsoever of any of it going to you, unless your mum had died before him. It's your mums money. You, as executor, can get the money out of the bank, but it needs to go to your mum once everything's settled.

getmore4less

johnD17 wrote: »

I thought that a DOV is only worthwhile in keeping assets tied up long term?

Estate is 345-365k.

johnD17 wrote: »

Trustees and beneficiaries are both me and my mum (is my understanding)

please see the will below:

OK you have a problem

When was this will drawn up and was IHT planing advise taken?

As as it stands the house goes into a immediate post death interest in possession trust for your mum so forms part of her estate for IHT purposes

She also gets all the other assets which are subject to IHT

but there is no transferable nil rate band to go with it.

You should get advice on the best way to do it, but depending on the split between the assets(house/other) you really need to look at diverting(DOV) some away from mum if it means her estate will also be subject to IHT.

johnD17

frustrating - will was only drawn up in 2015 (I think).

The new residence nil rate band (of >100k extra) may negate IHT for my mum's estate. (Assume this would apply to the future estate??)

Re this trust business, I've only today been told that it means the assets should go into a trust (and this from an investment advice firm who gave me free advice NOT any of the 3 solics) - so my next added worry is how I go about this.

Can anybody help explaining how a dov would be useful in this instance for tax mitigating purposes?

Keep_pedalling

Over the next few years the residential nil rate band will rise to £175k so your mother will have a combined nil rate of £500k, so if this was me and it was possible to do, I would be looking for you to jointly come up with a DoV that split the estate in such a way that your mother will inherit enough to live comfortable for the rest her her life without falling into IHT territory.

I would try also make it simple and avoid any trusts being involved as these can be expensive things to manage (so free advice could turn out to have very expensive ongoing costs)

I think you should jointly speak to an IFA who specialises in inheritance planning. This will not be free but will save both of you making any further very expensive mistakes.

getmore4less

(from memory as the will link has gone)

The trust exists the will set that up.
As it is just the house and it is an qualifying IIP the tax situation is simple.
the house belongs to mum(for all practical purposes).

What is her total estate with everything together.

Her nil rate band will climb to £500k as there is a house that will come to you.

if there is a big risk that her estate will grow over that(she could spend some) it will be worth reviewing diverting some of your dads assets to you.

I would also review the estate very carefully as I think you said elsewhere there were failed PETS that take it over £325k
There may be options to mitigate some of those.

If the house is your main residence and you plan to keep it that way and not want to buy another place there may be options to use that.

Really needs someone with the knowledge and access to all the detail to formulate a plan.