Inheritance problem

Marisco

Don't know if this is in the right place, but here seems as good as any. I'm asking for a friend (again!) I was on the employment board the other day for another friend, I really will have to stop singing the praises of the knowledgeable posters on MSE I don't know why they cannot join themselves, anyway I digress. I don't normally come out of the basement (DT )  What it is is, about 5/6 years ago her BIL died and left her oh about 115k, he gave his son and daughter 10k each at the time (he has 2 kids and she has 2 girls, his late 30's hers late 40's) She gave her girls £1000 each, she'd have given them the same but her oh wasn't happy about that. They blew the lot, son in about 6 months, daughter took 12 months. Anyway, to cut a long story short and stop you all losing the will to live, she wants to know if she can open a bank account with one of the daughters and put about 20k in it, so that if she dies before her oh, that money will be safe for the girls? There would be no problem with one daughter not sharing as they are very close.

Her husband is a lovely bloke but feels the money should go to his kids as it came from his brother, she doesn't think that is fair as it's all "their" money, they've never had separate accounts as many couples do, it's always been shared. Bear in mind I cannot answer detailed questions only what she has told me, and she also said she's not bothered about the "morality" of it, but only wants to know if it is possible. He's also (her words) airy fairy about money, so long as things are ticking over he leaves everything to her (he always has done) They have been together for about 27 years (I think) and are both in their late 60's. Unlike me, she a worrier and this coronavirus malarky has got her going. I keep telling her she's unlikely to keel over anytime soon, as she is reasonably healthy, but I know what she's like *rolls eyes* 

onwards&upwards

So to summarise, is the question... ‘ can a married person put £20k of jointly owned money into a joint account with a third party in order that it not go to the spouse should they die’?

Marisco

onwards&upwards said:

So to summarise, is the question... ‘ can a married person put £20k of jointly owned money into a joint account with a third party in order that it not go to the spouse should they die’?

I wouldn't have said so, no. She wants to leave something for her daughters, but because the bulk of it was an inheritance from BIL, her oh thinks it should all go to his kids. Nothing to do with it not going to her oh. From what I can gather (I texted her just before replying) they have both got ISA's in their own names (as apparently, according to her and I don't know if it's correct, you can't have joint ISA's) so she would take it out of her ISA. What she wants to know is, can she open a joint account with her daughter, so that her daughter (and sister) get the money in the account when she dies.

xylophone

Yes, she can open a joint account with her daughter. 
On her death, the money  would pass to the daughter by survivorship.

Re IHT https://www.thisismoney.co.uk/money/wealthcheck/article-6565421/Is-money-held-mums-joint-bank-account-late-nan-subject-IHT.html

onwards&upwards

Marisco said:

onwards&upwards said:

So to summarise, is the question... ‘ can a married person put £20k of jointly owned money into a joint account with a third party in order that it not go to the spouse should they die’?

I wouldn't have said so, no. She wants to leave something for her daughters, but because the bulk of it was an inheritance from BIL, her oh thinks it should all go to his kids. Nothing to do with it not going to her oh. From what I can gather (I texted her just before replying) they have both got ISA's in their own names (as apparently, according to her and I don't know if it's correct, you can't have joint ISA's) so she would take it out of her ISA. What she wants to know is, can she open a joint account with her daughter, so that her daughter (and sister) get the money in the account when she dies.

Yes she can. 

It would mean her OH not having access to it should she die.

It definitely sounds like a marital communication issue more than anything else though!

theoretica

But if she has an ISA in her own name why take money out?  Why not make a will leaving some or all of the ISA to her daughters?

Marisco

theoretica said:

But if she has an ISA in her own name why take money out?  Why not make a will leaving some or all of the ISA to her daughters?

I had to text her to ask, she said something about the money in the ISA automatically goes to her oh. I'm not sure what she means TBH. As for a will, it would cause arguments as her oh reckons his kids should get it all and she wants her kids to get something. So she thought this might be the best way to avoid arguments.

xylophone

I had to text her to ask, she said something about the money in the ISA automatically goes to her oh. 

There may be some confusion here - the money in the ISA may be willed to anybody without affecting the fact that the amount of the  money in the ISA at death may be used by the spouse as an extra  ISA allowance.

Thus, if Mary Jones has £50,000 in her ISA at death and leaves that money in her will to her cousin Jane, her husband John may still move £50,000 of the money in any of his non ISA accounts into an ISA ( the additional permitted subscription) without affecting his own ISA allowance.

Savvy_Sue

Do they have wills? Because that might be a useful addition to giving money away / putting it into joint accounts now. 

onwards&upwards

Marisco said:

theoretica said:

But if she has an ISA in her own name why take money out?  Why not make a will leaving some or all of the ISA to her daughters?

I had to text her to ask, she said something about the money in the ISA automatically goes to her oh. I'm not sure what she means TBH. As for a will, it would cause arguments as her oh reckons his kids should get it all and she wants her kids to get something. So she thought this might be the best way to avoid arguments.

I don’t get how writing a will would cause arguments but her taking 20k of their joint money (that originally came from his brother dying) and basically giving it away so it wasn’t his anymore, wouldn’t!

Maybe this is better waiting till the bereavement is less raw, and the money has become fully merged in and indistinguishable from the rest of their pot, then they can discuss wills together.

I do see his point that he feels his brother’s money should benefit his brother’s niece and nephew, unless he treated the stepdaughters like nieces too, but there is a 10 year age gap so maybe not.  How old were all the kids when they blended the family?  

lees80

Given the rough ages of his children when he split with their mother, I suppose its possible that he feels some kind of guilt towards them.

Money does strange things to people. The higher the amount the stranger they get.