Inheritance Headache

1bellagio

Hi Everyone,
Looking for some assistance here. Our mother passed last August 2020. Her estate was less than 50k (excluding the house which they jointly owned) and her bank accounts were passed to her husband our father. While we are still going through her paperwork we now find ourselves in an unfortunate position. My father passed on New Years Day 2021 and we now find ourselves swamped in an inheritance conundrum. 
The will for our father was a straight forward split three ways between the children. Our fathers estate including the house which he owned is just shy of 900k. Reading government guidelines, it appears that we have to pay large amounts on inheritance tax. Loosing both parents so close together has caught us out. Where do we go from here? Do I need a specialist inheritance lawyer? I'm new to all of this and probably blurred by the grief.

Also, am I correct in saying that I need to insure the house.

Thanks for any assistance in advance.

Alter_ego

Sorry to hear of your losses. Take a while before you do anything. I'd phone their insurer and ask advice

Linton

You will need to sort out the house insurance, most other things can wait.  Talk to the current insurer, they may have a specialist bereavement team.  Is the house unoccupied now?   If so the insurer must be informed and there will almost certainly be a requirement that it is inspected internally every week or two and also that the central heating be left on or drained.

If you are well organised, happy handling paperwork and spend time reading the large amount of info available on the net. (as a starter: https://www.gov.uk/browse/births-deaths-marriages/death), and asking here if you are confused, you should be able to manage everything yourself.  Though it depends on the will.  If the will or your father's affairs are complex  legal advice may be required.  In most cases a normal High Street solicitor would be fine.

newatc

Not an expert but IHT may not be as much as you fear as you should be able your mother's unused allowance.  I suspect it will be the IHT forms within the probate process but worth having a go yourself knowing you can call on a STEP (specialists in IHT and probate) solicitor if it proves too tasking.
It's a tough time for you, good luck in the process

Flugelhorn

agree with the others - look after yourselves, insure the house and take a deep breath

because there is property involved and the estate is left to immediate family you may not be  looking at much if any IHT - have a look at the WHICH site:
"Inheritance tax on property for married couples On top of the main allowance, the transferable main residence allowance that came into effect in April 2017 means people can leave significantly more, if the estate includes a property being left to direct descendants (children, grandchildren and stepchildren, but not nieces or nephews). As of April 2020, it increased to £175,000 from £150,000 for 2019-20.  This effectively raises the IHT-free allowance to £500,000 for most people. Where married couples jointly own a family home and want to leave it to their children, the total IHT exemption will be £1m.  If this allowance is transferred between spouses, the value of the transferred allowance will depend on when the second, not first, partner dies. 

Read more: https://www.which.co.uk/money/tax/inheritance-tax/inheritance-tax-for-married-couples-and-civil-partners-a1vvf7h17jpc - Which?

Marcon

1bellagio said:

Hi Everyone,
Looking for some assistance here. Our mother passed last August 2020. Her estate was less than 50k (excluding the house which they jointly owned) and her bank accounts were passed to her husband our father. While we are still going through her paperwork we now find ourselves in an unfortunate position. My father passed on New Years Day 2021 and we now find ourselves swamped in an inheritance conundrum. 
The will for our father was a straight forward split three ways between the children. Our fathers estate including the house which he owned is just shy of 900k. Reading government guidelines, it appears that we have to pay large amounts on inheritance tax. Loosing both parents so close together has caught us out. Where do we go from here? Do I need a specialist inheritance lawyer? I'm new to all of this and probably blurred by the grief.

Also, am I correct in saying that I need to insure the house.

Thanks for any assistance in advance.

This is all new and unwelcome to you at a time when you are newly bereaved and grieving for both parents. It is fairly standard stuff to most competent solicitors, so you don't need a specialist inheritance lawyer - but sounds as if you could do with a bit of hand holding from a solicitor just to keep you on the right track.

IHT won't be nearly as bad as you at first feared, for the reasons set out by other replies above.

Insuring the house is the responsibility of the executors of your father's will. Check the expiry date of the current policy and notify the insurers, who are likely to let the policy run its course but will almost certainly impose conditions on an unoccupied policy. These are usual sensible ones about asking some reliable to check the property weekly and keeping heating on at an adequate level during the winter. 

I'm sorry you've had such a rotten start to this year on top of losing your mother last year.

tacpot12

It is very distressing to lose both parents so close together. I am helping a family friend with a very similar situation. I agree with Flugelhorn's assessment which is that because your mother didn't use the IHT allowances that she was entitled, so these can be passed to your father and should mean that your father's estate would have to be over £1M to pay any IHT. 

It will take time to get over the grief, but you should be aware that there are deadlines to pay any IHT and also to request to transfer the unused allowances from your mother to your father. I shall be  trying to use the Master Financial Summary spreadsheet available here to help my friend: UK Probate | Which HMRC Form Do I Use?  This can be used to estimate the value of each estate so that you can report their likely values. Slow and steady will get the job done without the need to pay a solicitor to do it all. You can pay solicitors for legal advice without having to pay them to do all the administrative work for you as that does get expensive, especially for two estates. 

Keep_pedalling

If your parents were married then there will be no IHT to pay on the first £1M of your father’s estate. Your mother’s nil rate band is transferable to your father’s estate as well as her residential nil rate band.

getmore4less

How much is the house worth?
Who are the named executors? 

1bellagio

getmore4less said:

How much is the house worth?
Who are the named executors? 

Sorry for the late reply. Things starting to settle. The house is worth 800k and my sister is the executor.