How do I do this?

royP_2

My will states that when I die any finance that I have will be distributed 50% to each of my two sons.
One of my sons is in need of some cash now £10,000 for repairs to the roof of his house.
How do I arrange that when I die the other son gets £10,000 more than the son who has cash for his roof now.
Plus what is the tax position if I go ahead with this,

Flugelhorn

I wonder if the simplest way would for this to be an interest free loan (with paperwork) then the loan would be payable back to the estate on your death and hence your son would get 10K less out of the estate 

Brie

Or give the other son £10k now too?

km1500

if you can afford it I would definitely go with what @Brie says ie give them both 10K

Brie

And, as I understand it, there is no tax implication unless you have so much money/assets that your estate would need to pay inheritance tax AND you die within 7 years.  

The other good reason to give them both the same amount now is to prevent any resentment.  Son1 needs £10k and Son2 doesn't.  But if you only give the ££ to Son1, especially if it's interest free, he gets a greater value from you than Son2.  Let's say you live for another 30 years.  And let's say there's an average inflation rate of 3%.  Son1's £10k will be equivalent to a value of nearly £25k. 

So if you don't give Son2 the same amount now you might want to build something into your loan letter to state there is an assumed interest rate equivalent to some standard measure of inflation (RPI or something?).  

Believe me I've thought about this a lot because there's something similar in our family where some siblings were given money that would be deducted from their share of the estate and others of us weren't but had to finance our own way, pay for mortgages etc.  It is a continuing point of discussion.

MikeJXE

Why does it have to be complicated 

If you want to give 10k to one son give 10k to the other son 

Nothing to be gained by tying it up with terms and conditions 

Marcon

royP_2 said:

My will states that when I die any finance that I have will be distributed 50% to each of my two sons.
One of my sons is in need of some cash now £10,000 for repairs to the roof of his house.
How do I arrange that when I die the other son gets £10,000 more than the son who has cash for his roof now.
Plus what is the tax position if I go ahead with this,

Rewrite your will (or just add a codicil - but get it done professionally) leaving the 'other son' £10,000, with the remaining finance being distributed 50:50.

tetrarch

Who is/are the executors?

As long as they know and have it noted somewhere then it is just a noted gift now (I would note it as £3k and £7K to sutilise the annual exemption) and a DoV agreement between the sons during probate

Regards

Tet

doodling

Hi,

tetrarch said:

Who is/are the executors?

As long as they know and have it noted somewhere then it is just a noted gift now (I would note it as £3k and £7K to sutilise the annual exemption) and a DoV agreement between the sons during probate

Regards

Tet

That is fine if the two sons are both reasonable people and are not under any kind of stress (like just after losing a loved one).

Unfortunately in the real world people don't act reasonably, especially when stressed - there is no guarantee that the son who has received a gift would agree to a deed of variation to reduce his inheritance.

If you dont want to mess with your will then the two choices are, as previously stated:
1. Give both sons the same amount of money now.
2. Give one son a well documented loan, repayable on your death.  (This has a small risk that if you die with a significant inheritance tax bill and with no cash assets then he might actually be asked to repay it, albeit temporarily).  Your choice as to how you handle interest, if any, but others might want to comment on whether there are tax implications.

royP_2

Thanks all for your advice.