Tenants in Common question.

TheCraigClan

Hello All.

MIL died last year
FIL died this year

He hadn't got far with her paperwork, and after he died I discovered their wills. They had been forgotten about and they'd also changed their house to tenants in common when they wrote the wills.

According to how I read the wills (mirrored wills reversed for husband - wife), the first £325k of her estate should be held in trust and controlled by my wife and FIL. With any remaining funds going to FIL.
He should be allowed to stay in the house.
Her estate is under the NBR and RNBR thresholds, so I submitted her probate application online.

I'm working through his probate application now and there will be IHT to pay.
There's the main IHT400 form to fill out, and at least a dozen schedule forms too.

Upon her death, her half of the house belongs to the trust, managed by my wife and him.
Although at the time we had no idea because we all thought the house was joint tenants.

So on IHT400 - q31, Jointly owned assets - 'Did the deceased jointly own any assets with any other persons'. Did he jointly own the house with his wife's trust? Even though while he was still alive we had no idea the wills existed and assumed the house was solely his?

Joint owners is different from joint tenants right?
IHT404 wants me to specify who else the assets are jointly owned by.
He owned one half of the house, so does that mean the trust described in her will controls the other half?

Having so little time between them dying, nothing getting sorted by my FIL and then finding will afterwards, I'm often have trouble getting my thought process right.
In my mind I'm imagining getting her affairs in order as if we knew about the will while he was alive, then I can deal with his estate later.

Then I get to IHT400 - q42, Interests in another estate. According to how I read the will he would have been owed about £65k from her estate, which cannot be paid into his accounts now. It doesn't seem sensible to suggest he was owed money from her estate when they are both gone now anyway, and there would be no difference in the IHT payable.

Sorry it's a long ramble. I've approached a solicitor to see if they can help with this, but I feel like I'm almost able to do it myself.

Thanks!

Savvy_Sue

What does FIL's will say?

And how much is the house worth?

TheCraigClan

Hiya. MILs will states that £325k goes to the trust if he outlives her.
FIL's will states that if he outlives his wife then the various percentages of the estate are distributed among the children.
The house is worth just under £180k

Savvy_Sue

And total value of FIL's estate? I'm not sure where the need to pay IHT is coming from, but I am no expert ... 

You do have an option in between sorting it yourself, and instructing a solicitor to sort it for you, and it's one I'd recommend. 

You ask the solicitor to explain the wording of the wills, and the implications of nothing having been done with your MIL's until now - it's not at all uncommon for nothing to be done on the first death, and submitting it for probate now is sensible, and possibly necessary. And then you go away and act on that advice. 

Because if you instruct the solicitor to sort it for you (rather than just asking for their advice), you will still have to do a lot of the legwork, and wait for them to act on the information you give them, and pay for the privilege. 

It's entirely possible that over the next few days and the weekend that someone far more knowledgeable than me will be along to explain what you need to do, or ask better questions than me. 

Keep_pedalling

This sounds like a very old will, the need to leave your NRB to children was made obsolete when spousal exemption was introduced in 1974.

What was the total value of your mother and father’s estates. The joint value would need to exceed £830k before any IHT kicked in. Both have a NRB of £325k and their combined residential NRB covers the full value of the house. 

TheCraigClan

Hello. The wills are from 2007.
They had a small cheap house and A LOT of money, so there will be IHT to pay.
I'll call the solicitor I reckon, I'm working through IHT400 and all the schedules but it's tricky because many schedules need to be done before then applying those totals to other schedules, and it's getting quite annoying. At least that's how I see it.

Keep_pedalling

TheCraigClan said:

Hello. The wills are from 2007.
They had a small cheap house and A LOT of money, so there will be IHT to pay.
I'll call the solicitor I reckon, I'm working through IHT400 and all the schedules but it's tricky because many schedules need to be done before then applying those totals to other schedules, and it's getting quite annoying. At least that's how I see it.

Did any of that money come from downsizing from a more expensive house? If it did you can claim more of their RNRB allowances.

The lesson here is that there comes a point in your life where you need to stop hoarding your savings and start spending it or giving it away.

TheCraigClan

Same little house since the 70's.
MIL housebound for over a decade.
FIL just gave up after his wife died. Very sad.

I'm seeing the probate solicitor next week. Cheers!