Clarification on what these terms in my passed-away Father's will mean?

Autumn868

Hello I was wondering if anyone can help me with a few matters relating to my father's will please?

He sadly passed-away in early April from the virus.
Myself & my mum + siblings are now processing matters, and today my mum has sent me photos of his will which he created via a solicitor's firm (dated 1996).

The following is written:
''I give to be divided in equal shares per capita amongst those who survive me of my children an amount equal to the maximum which can be given without incurring any liability for inheritance tax.... xxxx''

And then:
''I give the residue of my property after payment out of it of all legacies given by me to my wife....xxx''

My understanding of this is that myself and my siblings will each receive a cash sum of upto £325,000... | And my mum will the receive all the other cash + both the houses.
Is that correct though, or have I misunderstood the text?

In regards to sum of value, my father's net worth (properties/cash/shares) would be in the £1.5million region, however approx £1million of those assets are the form of houses (1 lived in / 1 rented out).
Out of the remaining £500,000 (estimate) a large percentage is invested in stocks & bonds (via brokerage funds).
He had life-insurance (although I personally am unsure of the amount), as well as quite a substantive private pension + public-sector pension too (although that has not been processed yet).
But so I wasn't sure if those things would also be all converted into cash, or if the stocks & shares would remain in that form, thus not be included in the sum paid to myself & my siblings, instead passed to my mum along with the properties?

It still is very early days, and so all these matters will be processed over the coming weeks & months, but I just wanted to check & confirm if those statements of text in thewill do mean what I have interpreted them as please?


*I personally earn just over 30k per year salary, so unsure if my tax liability will be affected if I do inherit any cash?


Thankyou in-advance

sarahjane1408

Hello 

I am so sorry to hear your dad has died.  

Based on your question, it sounds as if your father has left a legacy of £325,000 to be divided equally between the children (rather you each receiving that amount).  Anything above £325k would be subject to inheritance tax. You would have to bring into account and potentially exempt transfers/chargeable gifts within the last 7 years which would reduce this down.

Everything else (I.e the residue) is to your mum and spouse relief would be applied on that to keep the estate free of IHT.

The pension policies etc will depend upon your dads age, the individual policies and what if any benefit he’s received from them to date. 

Will terms like your fathers were common pre 2007 when there was no option to transfer over an unused allowance.

Do send me a message if you want me to help anymore.  Again, I am so sorry for your loss

Best wishes

Sarah

pphillips

On the face of the will,  £325,000 to be split between you and your siblings less any potential exempt transfers or lifetime chargeable transfers made by your father in the last 7 years.

Any life insurance or death in service payment will also be free of inheritance tax if they have been written in trust.

It seems unlikely that you and your siblings have inherited your father's residence nil rate band of up to:
£150,000 if he died before 6th April 
£175,000 if he died on or after 6th April 
As both properties are probably jointly owned with your mother and one appears to be a buy to let.

Any inheritance you are due won't affect the amount of income tax you pay as you appear to be inheriting cash and also any estate income is payable to the estate.

Keep_pedalling

You will not owe any tax on your inheritance, but your mother’s estate will now be well into IHT territory, so she should seek professional advice on tax planning from an independent financial advisor.

Autumn868

Hello and thankyou very much for your message, plus your kind words. 
I cried all day everyday for the 1st 5 days, but am settled & coping far better now than I had expected | But THAT is the thing which troubles & upsets me the most, as he was my lovely dad and the only one I will ever have, taken just like that within 9-days, but yet I only cried tears for his loss for 5-days....


In regards to the will though, I wasn't sure if the 325k threshold was per beneficiary, although I guess it makes more sense & logic that it would simply be a sum threshold (to be divided between as many people as he wishes).
Ultimately is this will is all correct and does go through as stated, and so I receive £108,000 cash into my bank account within the next few months, that will be life-changing in that it will help me secure my mortgage (which I've been saving-up a deposit for since 2018).

He may of created a newer will since that one potentially, and he was 66.

In regards to the 325k sum left to be divided between myself and my 2 siblings, 
he may potentially of had £325,000 cash in his bank accounts | But if he had below that sum in pure cash :: Instead for example he had 120k in cash / 200k invested stocks & shares, will it be the 120k divided between me & my siblings?
Or would his share-holdings be liquidated into cash, until the 325k sum is reached?

pphillips

It doesn't have to be liquidated as long as the asset is below the inheritance tax threshold 

Autumn868

pphillips said:

It doesn't have to be liquidated as long as the asset is below the inheritance tax threshold 

What I mean is if he has said he wants to leave us upto 325k, but he only had 125k in cash (the other 200k in stock & shares form) will it just be the 125k cash divided between me and my siblings?

Or would 200k worth of shares be spilt between myself and my siblings (but remaining in stocks & shares format)?

pphillips

Autumn868 said:

pphillips said:

It doesn't have to be liquidated as long as the asset is below the inheritance tax threshold 

What I mean is if he has said he wants to leave us upto 325k, but he only had 125k in cash (the other 200k in stock & shares form) will it just be the 125k cash divided between me and my siblings?

Or would 200k worth of shares be spilt between myself and my siblings (but remaining in stocks & shares format)?

It might be possible to split the shares and combine with cash to make up the shortfall.
Otherwise the shares or another asset would need to be sold if there is not enough cash
Either option needs to acheive enough capital to reach the inheritance tax threshold.

Brynsam

Autumn868 said:

pphillips said:

It doesn't have to be liquidated as long as the asset is below the inheritance tax threshold 

What I mean is if he has said he wants to leave us upto 325k, but he only had 125k in cash (the other 200k in stock & shares form) will it just be the 125k cash divided between me and my siblings?

Or would 200k worth of shares be spilt between myself and my siblings (but remaining in stocks & shares format)?

The executors would normally liquidate (turn into cash), rather than transferring in specie (as stocks and shares), otherwise the value would be fluctuating on a daily basis, making it very hard to share out equally. 

sarahjane1408

You should receive the full amount due to you under the terms of the Will. The executors night have to sell some shares to do that or perhaps appropriate shares over to you.

i can only imagine how your feeling.  Try and look after yourself.

Sarah

badger09

Autumn868 said:

Hello and thankyou very much for your message, plus your kind words. 
I cried all day everyday for the 1st 5 days, but am settled & coping far better now than I had expected | But THAT is the thing which troubles & upsets me the most, as he was my lovely dad and the only one I will ever have, taken just like that within 9-days, but yet I only cried tears for his loss for 5-days....


In regards to the will though, I wasn't sure if the 325k threshold was per beneficiary, although I guess it makes more sense & logic that it would simply be a sum threshold (to be divided between as many people as he wishes).
Ultimately is this will is all correct and does go through as stated, and so I receive £108,000 cash into my bank account within the next few months, that will be life-changing in that it will help me secure my mortgage (which I've been saving-up a deposit for since 2018).

He may of created a newer will since that one potentially, and he was 66.

In regards to the 325k sum left to be divided between myself and my 2 siblings, 
he may potentially of had £325,000 cash in his bank accounts | But if he had below that sum in pure cash :: Instead for example he had 120k in cash / 200k invested stocks & shares, will it be the 120k divided between me & my siblings?
Or would his share-holdings be liquidated into cash, until the 325k sum is reached?

Condolences on your loss. Don't beat yourself up the number of days you've spent crying about your lost dad. I still shed tears occasionally and I lost my lovely dad in traumatic circumstances (for me, thankfully not for him) more than 39 years ago.

2 questions:
Who are the executors named in the will which your mum has?

What makes you think he may have created a more recent will?