Some Will advice sought before seeing a solicitor

ezhiki

May I ask a few questions relating to Wills, I'd like to be a bit more knowledgeable about choices and decisions etc before sitting down with a solicitor.

We are both retired, own our home, I have a good pension from my job and upon my death my wife will have enough of an income from what will be her 'widows pension' from them for her to be well provided for.

The plan is for me and my wife to leave everything to each other in trust for the children, as we both have adult children from previous marriages see this as a good way to ensure our wishes are carried out.

Some questions if may.

   1). On the first death, should the surviving partner make a new Will simply leaving everything to the children, or is it fine if they just keep the one on in place as was, leaving all assets to the other in trust for the children?

   2). We're thinking of naming each other plus two of the children as executors and trustees, the thinking being it keeps the surviving partner involved in the decision making etc. We all have a long history of getting on well, our adult children have good relationships with each other and are pretty well off in their own rights. Is there another downside to doing this that I haven't thought of, say any legal reason?

   3). I was the executor for my mums Will who died recently and although there is a lot to do found it OK if you go through it each step at a time, but wanted to ask if anyone has experience of being a trustee as described here? Any comments about about carrying out the duties of a trustee?

   4). At the moment our house is in my name, no mortgage, (value is about £400,000), I bought it a year before we married, (25 years ago). What are the benefits or otherwise of changing that now to joint ownership or tenants in common. I'm thinking about the property allowance portion of inheritance that can be passed to your surviving partner.

   5). Also wondering about the difference between how much could be taken against the value of our home to pay for council health and social care costs if its solely in my name as opposed to say tenants in common? (We don't want to put the house in trust before death to protect some value).

I know the solicitor will advise and answer these questions, but wanted to get a little more informed beforehand as to what the likely answers or choices will be to be more prepared.

getmore4less

One issue with life interest trusts is it ring fences the assets for use by the spouse but they can't cash them in if they need the cash.

Are you ready to split the property effectively between all the kids.

Step kids are qualifying beneficiary for residential nil rate band.

Would assets other than property go into the trust?

ezhiki

Thank you, all good points.

All assets would go into trust, aside from a cash gift to each child and surviving spouse on the first death, (we're thinking maybe £15,000 each), the surviving spouse will still have enough cash available if needed from joint investments and be quite well off.

Just for a bit more context, we're heading towards the twilight years of our lives, this isn't the way we would have thought about writing our Wills if we'd have been younger, (and we didn't), so yes upon the first death we are happy to effectively split all assets from the 'dead' one of us between the kids, even with these assets ringfenced, me or my wife will still be able live and holiday etc etc quite nicely.

You've made us consider what would happen if years down the line the living one wanted to sell the house and say buy a small flat to move into? Would that be possible within the rules of the trust?

getmore4less

Downsizing can be built in.

Once the trust contains assets that earn income then the tax regime kicks in Which is more work for trustees.

Just houses the spouse live in have very little (no) overheads.

Gifts on first death reduce transferable nil rate bands so that needs to be considered.

Also if there are predeceased first spouses you need to consider multiple transferrable nil rates as the limit is 100% easy to loose a big chunk of IHT exemption for big estates.

theoretica

ezhiki said:

Some questions if may.

   1). On the first death, should the surviving partner make a new Will simply leaving everything to the children, or is it fine if they just keep the one on in place as was, leaving all assets to the other in trust for the children?

Making a new will may not be high on the list of priorities for the survivor.  Far better to write a will now that says what you want to happen in all foreseeable eventualities.

[Deleted User]

My parents had mirror wills and they both owned 50 percent of the house each 
when my mum passed away my dad had a lifetime interest possession in the house he was able to downsize if he wanted to 
my mums half was left to my sister & my son but they obviously couldn’t benefit from that until my dad passed away 

my dad passed away last summer and now the house is being sold and my sister and son will get the money from the sale of the house 
both my sister and myself are executors but she is happy for me to mainly deal with everything 

Mirror wills and separating the tenancy and changing the details on the land registry cost approx £350 back in  2017  

TBagpuss

1). On the first death, should the surviving partner make a new Will simply leaving everything to the children, or is it fine if they just keep the one on in place as was, leaving all assets to the other in trust for the children?

if the wills are done professionally to start with it shouldn't be necessary to change them following the first death, but it is generally good practice to review a will regularly 

   2). We're thinking of naming each other plus two of the children as executors and trustees, the thinking being it keeps the surviving partner involved in the decision making etc. We all have a long history of getting on well, our adult children have good relationships with each other and are pretty well off in their own rights. Is there another downside to doing this that I haven't thought of, say any legal reason?

For anything other than the simplest will it's good practice to have at least executors. No legal issue with having three.

   3). I was the executor for my mum's Will who died recently and although there is a lot to do found it OK if you go through it each step at a time, but wanted to ask if anyone has experience of being a trustee as described here? Any comments about about carrying out the duties of a trustee?

It depends on how complicated the trust is.  It's helpful to make sure that the people concerns are aware of their responsibilities - depending on the assets they may need to do tax returns, there may be issues about whether there are liquid assets that can be used for legal / accountancy advice if it is needed etc. 

   4). At the moment our house is in my name, no mortgage, (value is about £400,000), I bought it a year before we married, (25 years ago). What are the benefits or otherwise of changing that now to joint ownership or tenants in common. I'm thinking about the property allowance portion of inheritance that can be passed to your surviving partner.

Putting it into joint names my make thing much simpler specially if you happen to be the first to go.  I can't think of any obvious downsides for your or your wife - even if one of you need s to pay for care they would not force  sale while the other still lived there - if your wife needed care then if it's in your name they can't claim against it, but eqaully if you did, then the charge against it could take up more than half the equity, so there's not right answer. 

   5). Also wondering about the difference between how much could be taken against the value of our home to pay for council health and social care costs if its solely in my name as opposed to say tenants in common? (We don't want to put the house in trust before death to protect some value).
My understanding is that if it is your sole name, they could take more if it is you who needs care, but none if it were your wife, however if it is in joint names then that would limit how much they could take for either of you, so whether it is better or worse would depend on which of you needed the care - but either way, presumably you would want to be able to afford somewhere that wasn't the cheapest possible option?