Legal aid charge on house

trwil

Jude57 said:

trwil said:

Voyager2002 said:

I am surprised that no-one has suggested life insurance for your partner: just enough to pay off the Legal Aid debt.

I did consider that, its quite expensive for over 50s i think?

Surely it's worth getting some quotes? I doubt that cover of, say £30,000 (which would cover the Charge, legal costs and funeral costs) would cost very much per month. In your situation, the lack of life insurance for your partner could end up costing a great deal more. Why not have a look at the Insurance page on this site? Plenty of knowledgeable posters to advise you there.

Thanks, ill take a look

pjs493

When you rewrite your Wills, so that your step-children become beneficiaries in the event of your partner dying first or you both dying in an accident, consider using the National Free Wills Network. 

You can get your Wills drawn up for free and the hope is that you will choose a charity that is part of the network to leave a small (or large) bequest to in exchange for the free Will service. 

If you sign up, you’ll get a letter with a list of local law firms that are part of the scheme. Some firms may charge a small fee (eg to do an ID check or to register the location of your Will on the Certainty website). I’ve used the NFWN twice (first to write a mirror Will with my late husband, and again after he died, both firms has small fees of less than £20 that weren’t covered by the free Wills scheme so definitely worth doing). More complex estates may attract additional charges. The scheme is great if your Wills are simple and straightforward; which it sounds like it is in your case. 

I’m not entirely sure of your ages from what you’ve posted, but have you considered remortgaging or taking out a loan or a repayment agreement with Legal Aid in order to repay the debt against the house? If your partner explains their financial circumstances to them, they may consider a reduced repayment; it’s always worth a try. 

Do you have an option of withdrawing funds from your pension pot to pay off the debt? You mentioned that it is in the region of £300k and your partner is named as the beneficiary but you don’t mention if taking a lump sum is an option. As an aside, please make sure your partner is the named beneficiary, don’t just assume. As you’re not married, the pension company could decide that your have no one to pass this on to tax free if you die first so it would then form part of your estate and potentially push you into IHT territory. 

As others have mentioned, your situation would be simpler if you were legally married or civil partners. Might be worth a trip to a registry office even if it’s not something you want to make a big deal about because you’ve been together for so long, but from an inheritance and legal perspective it smooths things over somewhat.

trwil

pjs493 said:

When you rewrite your Wills, so that your step-children become beneficiaries in the event of your partner dying first or you both dying in an accident, consider using the National Free Wills Network. 

You can get your Wills drawn up for free and the hope is that you will choose a charity that is part of the network to leave a small (or large) bequest to in exchange for the free Will service. 

If you sign up, you’ll get a letter with a list of local law firms that are part of the scheme. Some firms may charge a small fee (eg to do an ID check or to register the location of your Will on the Certainty website). I’ve used the NFWN twice (first to write a mirror Will with my late husband, and again after he died, both firms has small fees of less than £20 that weren’t covered by the free Wills scheme so definitely worth doing). More complex estates may attract additional charges. The scheme is great if your Wills are simple and straightforward; which it sounds like it is in your case. 

I’m not entirely sure of your ages from what you’ve posted, but have you considered remortgaging or taking out a loan or a repayment agreement with Legal Aid in order to repay the debt against the house? If your partner explains their financial circumstances to them, they may consider a reduced repayment; it’s always worth a try. 

Do you have an option of withdrawing funds from your pension pot to pay off the debt? You mentioned that it is in the region of £300k and your partner is named as the beneficiary but you don’t mention if taking a lump sum is an option. As an aside, please make sure your partner is the named beneficiary, don’t just assume. As you’re not married, the pension company could decide that your have no one to pass this on to tax free if you die first so it would then form part of your estate and potentially push you into IHT territory. 

As others have mentioned, your situation would be simpler if you were legally married or civil partners. Might be worth a trip to a registry office even if it’s not something you want to make a big deal about because you’ve been together for so long, but from an inheritance and legal perspective it smooths things over somewhat.

Thanks for the full response, we are going to look at a civil partnership and this weekend took out life insurance for her for 15k ( i recalculated the debt on simple interest and it is 15k) and listed me as a trustee (we went with legal and general from the forms on this site).

I am not 55 yet, but did consider using part of my pension to pay off the debt when i hit 55 since i can then withdraw up to 25% tax free- and yes i have named her specifically both on my pension wishes form and my will.

As for re-writing the wills, i will look at the free scheme, to be honest we have used a local solicitor firm for decades and they are quite reasonable, but it will be worth looking at

Thanks.

pjs493

trwil said:

As for re-writing the wills, i will look at the free scheme, to be honest we have used a local solicitor firm for decades and they are quite reasonable, but it will be worth looking at

Thanks.

You might find your local firm is part if the scheme, it's worth asking the question.