ISA and Wills

outlaw777

Hi I hope you are well. When writing a will for your children can you include your ISA accounts? If yes say for example once the will is activated will it be easy for all the shares to be sold and passed onto the children or is this a going to cause the children a lot of complication once the will is activated, would it be better to sell all the shares now and distribute the money?

eskbanker

When an ISA holder dies, the account(s) must be closed and the proceeds distributed by the executors - it's not a complex process and all the more so if you leave the relevant documentation readily accessible.  Depending on the estate value, the executors may need to go through the probate process but again this isn't rocket science.

You might choose to sell up and distribute money now for other reasons but doing so to avoid some admin after your demise seems unnecessary....

jimjames

There are limits on how much you can give away without inheritance tax being an issue so that isn't automatically a solution either. Also once you sell the shares you then are holding cash which will start reducing due to inflation. Unless you are expecting to die imminently that may not be the best move.

For a will/estate all assets are taken into account, it doesn't matter if they are an ISA or a house, it's all included and you don't get a choice.

dunstonh

When writing a will for your children can you include your ISA accounts?

Its usually best not to specify certain accounts as you may not have that account at the time of death.  The Government could change the tax wrappers.  And you could change providers.    It's usually best to specify an amount or percentage of your estate (amount can be eroded by inflation but a percentage of your estate will be a relative constant).

 would it be better to sell all the shares now and distribute the money?

If you are looking to reduce the value of your estate then that would be more effective than a Will.

However, death and ISAs is not any more difficult than death and savings accounts.    

outlaw777

Thanks all so just to summarise its ok to put in my will and wont cause much hassle afterwards? Please advise on inheritance tax being an issue?

JGB1955

The ISAs can't be left to your children.  The stocks/shares/cash in any ISA at time of death will have to be cashed in and the proceeds distributed according to your will.

outlaw777

HJGB1955 said:

The ISAs can't be left to your children.  The stocks/shares/cash in any ISA at time of death will have to be cashed in and the proceeds distributed according to your will.

Hi what I wanted to know is once the will is activated will the bank sell the shares and pass onto the solicitor and then the solicitor acts out the share % to be passed onto the children according to the will, is all this easy and straight forward or will it be time consuming and complicated for the children?

eskbanker

outlaw777 said:

Please advise on inheritance tax being an issue?

I think the point Jim was making was that, while many choose to gift portions of their wealth while still alive, this is still counted as being part of your estate if you die within seven years of the gift, so anyone seeking to minimise inheritance tax by doing this needs to be aware that it doesn't necessarily achieve that.

outlaw777 said:

HJGB1955 said:

The ISAs can't be left to your children.  The stocks/shares/cash in any ISA at time of death will have to be cashed in and the proceeds distributed according to your will.

Hi what I wanted to know is once the will is activated will the bank sell the shares and pass onto the solicitor and then the solicitor acts out the share % to be passed onto the children according to the will, is all this easy and straight forward or will it be time consuming and complicated for the children?

If you're nominating a solicitor as your executor then they'll be more than familiar with the process of liquidating and distributing assets, so there's no need to worry about it....

underground99

outlaw777 said:

HJGB1955 said:

The ISAs can't be left to your children.  The stocks/shares/cash in any ISA at time of death will have to be cashed in and the proceeds distributed according to your will.

Hi what I wanted to know is once the will is activated will the bank sell the shares and pass onto the solicitor and then the solicitor acts out the share % to be passed onto the children according to the will, is all this easy and straight forward or will it be time consuming and complicated for the children?

You can just specify that the holdings in the ISA accounts be sold and the proceeds distributed to whoever you like. The solicitor or other executor can arrange this. It's not time consuming or complicated for the children to receive cash. The children can then buy whatever they like.

outlaw777

Thanks everyone for the help on this - much appreciated

dunstonh

It's probably best not to instruct that the ISAs are sold and proceeds distributed.    ISAs cease to exist on death and revert to being unwrapped.  Some beneficiaries prefer to receive the investments in situ rather than cash.    So, stating that the investments should be sold is unnecessary.  It removes choice.