Making a will

L123

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Keep_pedalling

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

L123

Keep_pedalling said:

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

Thank you but I understood it as setting up a trust would protect my children from CGT. Let me know if I’m wrong?

Emmia

L123 said:

Keep_pedalling said:

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

Thank you but I understood it as setting up a trust would protect my children from CGT. Let me know if I’m wrong?

What a trust may do is prevent you from releasing money from your property in the event you need care - before any inheritance (and I appreciate you want to help your children/grandchildren) the money you have tied up in savings, pension, property etc. should look after YOU first and foremost.

Keep_pedalling

L123 said:

Keep_pedalling said:

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

Thank you but I understood it as setting up a trust would protect my children from CGT. Let me know if I’m wrong?

I can’t see how CGT would even come into it as on your death all capital gains on your assets are disregarded. Inheritance tax may apply if your estate is big enough but trusts are not a magic formula for overcoming IHT. 

Spendless

We did our wills last year. 1st to each other than 50/50 to our 2 children, on of whom is now married. In the event of one of our kids deaths their share is to go to any children they have (neither currently have any so will was written in anticipation of them having kids). If our  kids die without having children of their own then their share goes to their sibling. The we were asked to consider the 'disaster clause' if all of went at once or even if DH or I was left as 'last man standing'. That took us some weeks to think of because we weren't happy with what the rules of intestacy would do at that point.

pjs493

Spendless said:

We did our wills last year. 1st to each other than 50/50 to our 2 children, on of whom is now married. In the event of one of our kids deaths their share is to go to any children they have (neither currently have any so will was written in anticipation of them having kids). If our  kids die without having children of their own then their share goes to their sibling. The we were asked to consider the 'disaster clause' if all of went at once or even if DH or I was left as 'last man standing'. That took us some weeks to think of because we weren't happy with what the rules of intestacy would do at that point.

In my situation (widowed unexpectedly with two infant children) I've done similar to you. Left everything 50/50 to my children (barring a charitable donation and a couple of sentimental bequests), if one of them predeceases me their share goes to their children or if they die without children their share goes to the surviving sibling. In my 'disaster clause' scenario everything is split between my sister's children. 

I think the rules of intestacy mean that in that situation my estate would go to my parents (if still living) but they don't need the money, then my sister would be next in line (but she doesn't need the money either and would much rather her children were provided for instead of me leaving it all to her). Plus, ultimately anything left to my sister would end up going to her children anyway, unless we're all wiped out in some sort of King Ralph moment in which case I'm sure some distant relative would be around to inherit.

thegreenone

Keep_pedalling said:

L123 said:

Keep_pedalling said:

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

Thank you but I understood it as setting up a trust would protect my children from CGT. Let me know if I’m wrong?

I can’t see how CGT would even come into it as on your death all capital gains on your assets are disregarded. Inheritance tax may apply if your estate is big enough but trusts are not a magic formula for overcoming IHT. 

There may be an element of CGT on the sale of property, if it sells for more than the probate valuation. 

My late Mum's flat was valued at £350k but sold for £375k.  I paid £1725.25 in CGT on the £25k difference. 

This was early 2021 when the country was in recovery from Covid and the housing market was uncertain.  The EA said they'd put it on for £365k and see if £350/£355k could be achieved.  At the last minute they changed to £375k.  I got full asking price from the first viewer but they had to drop out and then got fully asking from the third viewer.

It's definitely worth thinking about putting some money aside in case of CGT but not in a trust, because it needs to be paid within weeks of the property sale (six??) and a trust probably wouldn't be wound up in that time.

Keep_pedalling

thegreenone said:

Keep_pedalling said:

L123 said:

Keep_pedalling said:

L123 said:

Thank you for all of your help. We aren’t a blended family - when I mentioned husbands I meant my daughters husbands. This has given me some good ideas however, I’m concerned my solicitor hasn’t been more specific in the will - it’s very open to interpretation - and there’s been no discussion in setting up trusts which I believe help with capital gains tax for example.

Trusts only save CGT where the first to die leaves a share of their home to their children with a life interest trust to their spouse. Trusts are unlikely to be of use in your will and will only complicate things, as it sounds like you have a fairly straightforward estate. 

Thank you but I understood it as setting up a trust would protect my children from CGT. Let me know if I’m wrong?

I can’t see how CGT would even come into it as on your death all capital gains on your assets are disregarded. Inheritance tax may apply if your estate is big enough but trusts are not a magic formula for overcoming IHT. 

There may be an element of CGT on the sale of property, if it sells for more than the probate valuation. 

My late Mum's flat was valued at £350k but sold for £375k.  I paid £1725.25 in CGT on the £25k difference. 

This was early 2021 when the country was in recovery from Covid and the housing market was uncertain.  The EA said they'd put it on for £365k and see if £350/£355k could be achieved.  At the last minute they changed to £375k.  I got full asking price from the first viewer but they had to drop out and then got fully asking from the third viewer.

It's definitely worth thinking about putting some money aside in case of CGT but not in a trust, because it needs to be paid within weeks of the property sale (six??) and a trust probably wouldn't be wound up in that time.

True but a trust would not avoid that situation. If you put you house in trust in your lifetime then the trust would be facing a CGT liability on any gain over the lifetime of the trust.

Spendless

pjs493 said:

Spendless said:

We did our wills last year. 1st to each other than 50/50 to our 2 children, on of whom is now married. In the event of one of our kids deaths their share is to go to any children they have (neither currently have any so will was written in anticipation of them having kids). If our  kids die without having children of their own then their share goes to their sibling. The we were asked to consider the 'disaster clause' if all of went at once or even if DH or I was left as 'last man standing'. That took us some weeks to think of because we weren't happy with what the rules of intestacy would do at that point.

I think the rules of intestacy mean that in that situation my estate would go to my parents (if still living) but they don't need the money, then my sister would be next in line (but she doesn't need the money either and would much rather her children were provided for instead of me leaving it all to her). Plus, ultimately anything left to my sister would end up going to her children anyway, unless we're all wiped out in some sort of King Ralph moment in which case I'm sure some distant relative would be around to inherit.

Sorry for your loss. How it was explained to us is that if we all went at the same time  in one disaster, it would be assumed my youngest child had died last and it would be the rules of intestacy for her (her having inherited our estate - she's a student so owns nothing of value herself). That means it would currently go to her 3 grandparents. My FIL is a housebound invalid, who lives with my sis-i-law , he either doesn't need the money or it would go on care home fees. My parents are estranged from my sister, if we all went they wouldn't know what to do with their own estate let alone having ours as well (I went and talked this all through with them when deciding what to do). After that I have a grandmother alive at 98, who wouldn't need the money. Then my sis who is estranged from family and my husband's sis who doesn't need the money. After that it was our nieces and nephew (3), one again who doesn't need the money and the other we don't hear from because they are the children of my estranged sister. This is why it took us a few weeks to think through what we did want to happen instead.