Intestate: life interest v absolute interest?

DreamweaverB

It seem the rules regarding Intestacy have changed in the last few years; specifically the surviving spouse's 50% share of the remaining estate is now an "absolute interest" rather than a "life interest."

I'm struggling to find a simple definitive explanation of the difference, can anyone help?

Yorkshireman99

DreamweaverB wrote: »

It seem the rules regarding Intestacy have changed in the last few years; specifically the surviving spouse's 50% share of the remaining estate is now an "absolute interest" rather than a "life interest."

I'm struggling to find a simple definitive explanation of the difference, can anyone help?

Not sure about the change but the terms mean as follows. An absolute binterest means the the person owns it complely nand dispose of it as they wish. A life interest means taht the person can use it for their lifetime but upon the death reverts to someone esle. This most commonly refers to a person being allowed to live in a house for life but whodoes not own it. This means they cant sell or let it. Usually such an interest requires the life tenant, as they are called, to be responsible for repairs and maintenance and insurance..

Mojisola

DreamweaverB wrote: »

It seem the rules regarding Intestacy have changed in the last few years; specifically the surviving spouse's 50% share of the remaining estate is now an "absolute interest" rather than a "life interest."

I'm struggling to find a simple definitive explanation of the difference, can anyone help?

It's quite simple now -

If you are married or in a civil partnership and you die intestate, your spouse or civil partner will receive your personal possessions, along with:

if you have no children, grandchildren or great grandchildren, all of the rest of your estate.

if you have children, grandchildren or great grandchildren, the first £250,000 of your estate, plus half of the rest of the estate. The other half of the rest of the estate will go to your children.

Keep_pedalling

I think the question of how an intestate estate are currently distributed are answered in your previous thread. It is pointless looking at life interest unless the person died over 4 years ago.

DreamweaverB

Keep_pedalling wrote: »

It is pointless looking at life interest unless the person died over 4 years ago.

I agree. The reason for asking is that the paid professional advisor (an accountant) advised yesterday that "the wife would get £250k + a life interest in half of the rest of the estate" and then explained how a trust should be set up to administer this "50% life interest" so she could benefit from the income but not spend the capital...

I suspected this wasn't quite right which you've all confirmed so I guess it's time to get a different paid professional who is actually up to date with IHT rules!

Keep_pedalling

Do you actually need paid advice about the division of the estate, it is far from rocket science?

DreamweaverB

Keep_pedalling wrote: »

Do you actually need paid advice about the division of the estate, it is far from rocket science?

There were tax issues to do with the deceased's business and questions regarding the interplay between Agricultural, Business and Spousal relief hence the appointment with the accountant.

Tom99

DreamweaverB wrote: »

I agree. The reason for asking is that the paid professional advisor (an accountant) advised yesterday that "the wife would get £250k + a life interest in half of the rest of the estate" and then explained how a trust should be set up to administer this "50% life interest" so she could benefit from the income but not spend the capital...

I suspected this wasn't quite right which you've all confirmed so I guess it's time to get a different paid professional who is actually up to date with IHT rules!

Good idea who knows what else they are behind the times with.

Yorkshireman99

Tom99 wrote: »

Good idea who knows what else they are behind the times with.

I would be seeking a reduction in the fees paid as well.