How to spread late Dad’s savings amongst the family?

tooldle

Not just savings. If this lady were to go into care and the council were on the hook for the bill, she would find herself paying over most of her widows and old age pension as a contribution to costs. The 'pocket money' allowance is quite small. That money would have to cover everything. Treats, hairdresser, nails, clothes, slippers etc.
The lady is well provided for at present.

74jax

Mojisola said:

74jax said:

I'm confused. If this was what he wanted, this was in the Will right? So why did it all go to his wife? 
Who was the Executor and was the Will followed? If so, then what do you mean about spreading out as your dad wanted (he didn't as the Will started what he wanted to happen)?

Dad left his estate to Mum.

Mum wants to share some of the capital with their offspring. 

If the offspring want to spend it in ways that they know Dad would approve off, all to the good.

It's irrelevant that Dad didn't spread the money around the family in his will.

OK, but the thread title is about Dad's money, which I took to be the money he left in his Will to be spread around.  I read it as though this didn't happen and now the mum wants to do this (to honour the Will), So in this case the Executor didn't follow the Will, that is why I asked if the Will was followed or not as the title and post just confused me 🙈., which is easily done I know. 

Mellow_gogo

Hi all, OP here.  Many thanks for the responses and comments.

A few points that I should have mentioned initially:-

·       My Mum is in good health currently, and just wants to share with us the good financial fortune she has without potentially causing us problems/ expenses when she has gone.

·       We’re just about to start the Lasting Power of Attorney application process now.

·       My parents were married and had a will which states that at the death of one party, all assets transfer to the remaining partner, and thereafter to my brother and I. 

So from what I've read my Dad’s IHT allowance transfers over to my Mum, and in turn meaning that her total assets – house and savings - fall under the IHT threshold?  If true, then am I worrying unduly about how my Mum wants to ‘share’ the savings around? 

Her immediate plan is to provide my brother and I each with a one-off payment of £10,000, and also start a monthly ‘drip-feed’ direct debit to each of us to assist us and our families with everyday costs.  I’m hoping that these ideas would not fall under the ‘deprivation of assets’ rules?  As mentioned, she is healthy at the moment so touch wood there are no hints that care fees etc. are on the horizon.  

I also wasn’t aware of the ‘deed of variation’ possibility.  This seems like it may be a sensible option to consider?

Thanks again all.

Mojisola

Mellow_gogo said:

Her immediate plan is to provide my brother and I each with a one-off payment of £10,000, and also start a monthly ‘drip-feed’ direct debit to each of us to assist us and our families with everyday costs. 

It may be better to have a larger lump sum now (when Mum has no health concerns) rather than monthly amounts.

You can decide how to spend the lump sum (taking out an amount every month if you decide that) and Mum can feed any leftover cash back into her savings for her security.

It's easy to get used to having an extra 'bonus' gifted each month and to live up to that income (which can be a problem if it has to suddenly stop - such as your Mum needing to pay for care at home) - if you have to decide how to spend a lump sum, you approach the decisions differently.

Flugelhorn

largish lump sums out of capital cause problems under deprivation of assets, I don't know about smaller sums "out of excess income"

74jax

Mellow_gogo said:

Hi all, OP here.  Many thanks for the responses and comments.

A few points that I should have mentioned initially:-

·       My Mum is in good health currently, and just wants to share with us the good financial fortune she has without potentially causing us problems/ expenses when she has gone.

·       We’re just about to start the Lasting Power of Attorney application process now.

·       My parents were married and had a will which states that at the death of one party, all assets transfer to the remaining partner, and thereafter to my brother and I. 

So from what I've read my Dad’s IHT allowance transfers over to my Mum, and in turn meaning that her total assets – house and savings - fall under the IHT threshold?  If true, then am I worrying unduly about how my Mum wants to ‘share’ the savings around? 

Her immediate plan is to provide my brother and I each with a one-off payment of £10,000, and also start a monthly ‘drip-feed’ direct debit to each of us to assist us and our families with everyday costs.  I’m hoping that these ideas would not fall under the ‘deprivation of assets’ rules?  As mentioned, she is healthy at the moment so touch wood there are no hints that care fees etc. are on the horizon.  

I also wasn’t aware of the ‘deed of variation’ possibility.  This seems like it may be a sensible option to consider?

Thanks again all.

I agree with 👆 mojisola 👆 and the possibility of a larger gift now, do you think mum would be up for that? 

A deed of variation is definately something to look into, especially so soon after passing (I think you have 2 years, but best to do when the estate is actually being distributed).

His to get the PoA sorted, honestly it will be so much easier in the future if you ever need it. 

justwhat

Mellow_gogo said:

Hi all, OP here.  Many thanks for the responses and comments.

A few points that I should have mentioned initially:-

·       My Mum is in good health currently, and just wants to share with us the good financial fortune she has without potentially causing us problems/ expenses when she has gone.

·       We’re just about to start the Lasting Power of Attorney application process now.

·       My parents were married and had a will which states that at the death of one party, all assets transfer to the remaining partner, and thereafter to my brother and I. 

So from what I've read my Dad’s IHT allowance transfers over to my Mum, and in turn meaning that her total assets – house and savings - fall under the IHT threshold?  If true, then am I worrying unduly about how my Mum wants to ‘share’ the savings around? 

Her immediate plan is to provide my brother and I each with a one-off payment of £10,000, and also start a monthly ‘drip-feed’ direct debit to each of us to assist us and our families with everyday costs.  I’m hoping that these ideas would not fall under the ‘deprivation of assets’ rules?  As mentioned, she is healthy at the moment so touch wood there are no hints that care fees etc. are on the horizon.  

I also wasn’t aware of the ‘deed of variation’ possibility.  This seems like it may be a sensible option to consider?

Thanks again all.

My FIL passed away earlier in the year and we were in the same position as yourself. IHT is fairly easy to solve by various methods as long as estate is under a certain amount.

Care cost Planning and decision making was our big issue.  Some people believe private is better than council care homes. 

But many people cannot even afford long term private anyway , so i don't see much point in budgeting for it also not all council care homes are bad.

We did a "deed of variation" to deal with most of the savings and property sale. However our MIL still has a large amount of saving that could not be dealt with , as it was her own savings. She at the time wanted to retain control of the saving.(however she is now concerned about what will happen to it)

If you decide to minimize savings you need to try too remember not too accumulate more via income/pension lol 

Some of these financial decisions are time critical and have long term financial effects. 

IHT take a percentage(if you hit thresholds) and the care home take it all if you live long enough(more or less).  

tooldle

"IHT take a percentage(if you hit thresholds) and the care home take it all if you live long enough(more or less)"

It really does depend on income. My mum has been in a care home for over 9 years. Her capital is intact. She has pension income and i draw a monthly amount from her capital to plug the gap between income and fees. It really isn't a given that all capital will be consumed and in my mum's case her capital has grown over the time she has been in the care home. Consider the OP's figures for house value and savings, the starting points are not too dissimilar.

Keep_pedalling

74jax said:

Mellow_gogo said:

Hi all, OP here.  Many thanks for the responses and comments.

A few points that I should have mentioned initially:-

·       My Mum is in good health currently, and just wants to share with us the good financial fortune she has without potentially causing us problems/ expenses when she has gone.

·       We’re just about to start the Lasting Power of Attorney application process now.

·       My parents were married and had a will which states that at the death of one party, all assets transfer to the remaining partner, and thereafter to my brother and I. 

So from what I've read my Dad’s IHT allowance transfers over to my Mum, and in turn meaning that her total assets – house and savings - fall under the IHT threshold?  If true, then am I worrying unduly about how my Mum wants to ‘share’ the savings around? 

Her immediate plan is to provide my brother and I each with a one-off payment of £10,000, and also start a monthly ‘drip-feed’ direct debit to each of us to assist us and our families with everyday costs.  I’m hoping that these ideas would not fall under the ‘deprivation of assets’ rules?  As mentioned, she is healthy at the moment so touch wood there are no hints that care fees etc. are on the horizon.  

I also wasn’t aware of the ‘deed of variation’ possibility.  This seems like it may be a sensible option to consider?

Thanks again all.

I agree with 👆 mojisola 👆 and the possibility of a larger gift now, do you think mum would be up for that? 

A deed of variation is definately something to look into, especially so soon after passing (I think you have 2 years, but best to do when the estate is actually being distributed).

His to get the PoA sorted, honestly it will be so much easier in the future if you ever need it. 

A deed of variation is not appropriate in this situation it will just lower the amount of transferable NRB on the second death so no need for this complication.

justwhat

A deed of variation is not appropriate in this situation it will just lower the amount of transferable NRB on the second death so no need for this complication.

Deed of variation in this case will mitigate care costs.  Person is in good health and currently has no need to plan for care costs.