House in deceased husbands name only and spouse is sole beneficiary in will

bob_a_builder

Please can someone throw some light on this ...

My FIL died recently and I'm helping my wife sorting out what needs to be done, and have come across an unexpected hic-up
In laws were a married couple, the will names surviving MIL as the sole beneficiary, but on looking at the deeds of the house it seems the house was held only in his name.(i.e a single 'proprietor listed on the deeds). 
House value is circa 425k so above the magic 325k.

So is IHT going to be payable on that difference or can it pass to the spouse without charge ?

TcpnT

No IHT for transfers between spouses

techphobe

Any parts of the estate passing to a spouse is exempt from inheritance tax. Then when MIL dies an estate calculation is done with 2 x £325k as the nil rate band (or whatever is left over after FILs will has been executed if it leaves assets to other beneficiaries). 

Plus if they leave the house (or it’s’ proceeds if sold before MILs death) to their children an extra residence nil rate band is available so their total IHT free estate could be up to £1m. 

Keep_pedalling

It does mean however that probate will be required to transfer the house to your MIL name.

bob_a_builder

Thanks
Yes, it was reading about transferring the house which alerted me to the probate requirement, but I had thought because it was in his single name we would only be able to apply the 325K allowance, and thought it could be an expensive issue 
So its good to hear "No IHT for transfers between spouses"

thegreenone

bob_a_builder said:

In laws were a married couple, the will names surviving MIL as the sole beneficiary, but on looking at the deeds of the house it seems the house was held only in his name.(i.e a single 'proprietor listed on the deeds). 

This was very common back in the 50's, 60's where, predominantly, only a man/husband could get a mortgage so the deeds were solely in his name.

My FIL died NYE 2022 and it's been so complicated and long-winded for my husband and his sister (other issues too).  Please persevere and have the house registered in your MiL's name.  Very importantly, in the near future, your MiL needs to have a new Will and POA drawn up.

bob_a_builder

Thanks for the update on the historic mortgage situation, wasn't aware of that 

Yes, we are moving ahead with getting the house moved to her name, filling in the Probate forms now as thats required to do that transfer.

But will she really need a new will ?
Although she named her husband as her Executor, It does specifically say in case of him failing to survive her, that role passes to their daughters.
Will just refers to "bequeathing her whole estate" which should include the house once its transferred - shouldn't it  ?

We already had both Medical & Financial LPAs in place some years before recent events.