Help understanding will

Gloriwulf

Sorry for the long post but I thought it best to include as much information as possible.

My husband was offered a free will consult by a firm through his employer. We then paid the firm to draft our wills. We are in our 40s and have no children. We own our own house as joint tenants.

I just wanted a simple will, where everything goes to the survivor, but my husband has been persuaded by the consultant that we need to sever our joint tenancy and create a trust for the deceased’s share on their death, to protect it from care home fees. I’d rather not bother with either of these and if the house has to be sold for care fees when the survivor can no longer live there, so be it.

I don’t have a lot of faith in the consultant; he’s already made several mistakes in the drafting, so I’m considering having the will checked over by a third party. However, as that means expending yet more money (on what was supposed to be a ‘free’ service) I was hoping someone here could do a sense check for me.

I’ve transcribed the main clauses below and I have some questions that either the consultant ignored (or that were not answered to my satisfaction) that I would be grateful for any advice on.

The trustees are my brothers in law.

The house is worth about 280k

Does the 50% share belonging to the deceased go into the pot to make up the gift of money (assuming other liquid funds do not equal or exceed the nrb)? There is unlikely to be savings coming anywhere close to the nrb.

Would legal title to the share have to be transferred to the trustees?

If so, what allows the surviving spouse to remain in the house? (Could the trustees force a sale to facilitate payment to beneficiaries?). There is no mention in the will of a lifetime interest in the house.

If the surviving spouse wishes to sell and move, would they need the agreement of the trustees and would they have any right to use the funds from the deceased share to go towards the new house?




4.Gift of Money
Upon my death, I give a sum of money equal to the maximum amount I can give without inheritance tax becoming payable as a result of my death, taking into account any lifetime gifts or transferred nil rate bands (the Nil Rate Fund) to my Trustees to hold on discretionary trust as follows, giving due regard to any letter of wishes I prepare:
4.1. "My discretionary beneficiaries" means my wife,xxxx, my niece 1, my niece 2, my niece 3, my niece 4, and my nephew
4.2. "The trust period" means the period starting with the date of my death and ending 125 years after.
4.3. My trustees will apply the income of the Nil Rate Band Fund for the benefit of my Discretionary Beneficiaries as my Trustees think fit or to accumulate the whole or any part of it until the end of the Trust period.
4.4. My Trustees will apply the capital of my Nil Rate fund for the benefit of my Discretionary Beneficiaries as my Trustees think fit until the end of the Trust Period.

5 Gifts of personal posseions
In this clause, what I refer to as 'personal possessions' (personal chattels) has the meaning given in Section 3(1) of the Inheritance and Trustees' Powers Act 2014. I give my personal possessions , not otherwise dealt with by this will to my wife xxxx

6. Definition of my estate
My estate shall mean all my legal and beneficial interests in property, money, and possessions.

7. Administration of my estate
My executors may sell or convert any or all of the remaining assets as they consider appropriate and then shall hold my estate in trust on the following terms:
7.1 to pay my debts and any funeral costs, executor costs or administration expenses.
7.2 to pay any tax or duty relating to assets passing under this will or due as a result of my death or any gifts I made during my lifetime,  unless this will specifies otherwise.
7.3 my Trustees shall hold whatever remains, including any income earned after my death, to pass to my wife xxxx absolutely,  subject to her surviving me by 30 days  unless it cannot be ascertained which of us survived the other in which case this survival condition shall not take effect. If this gift should fail then it shall be held in the trusts set out below

Keep_pedalling

I agree with you this is nuts, if you have no direct descendants then protecting half your assets from care costs is just silly, far more important to leave the surviving spouse the means to pay for the best care they can get if they need it. 

Discretionary trusts just create massive complexities for what should be a very simple estate and there is no point in any IHT provision, IHT trusts were virtually made redundant with the introduction of the transferable NRB.

Browntoa

A badly drawn up discretionary trust is worse than no will at all .

Incorrectly done it can open up the whole estate to tax 

Avoid, do a simple "I leave x to so and so " on my death will 

Savvy_Sue

Agree, all you need is a very simple "I leave it all to spouse, and if spouse doesn't survive me then to niblings". You may need to identify the niblings, because I have a vague feeling that the default is blood niblings - so I have 6 and DH has none under that scenario, but actually he'd want mine to inherit. 

If one of you needs care, the house is safe as long as the other one is living in it, and once they're not then what do they need a house for? Yes, I'm being blunt ... 

Mojisola

Gloriwulf said:

My husband was offered a free will consult by a firm through his employer. We then paid the firm to draft our wills. We are in our 40s and have no children. We own our own house as joint tenants.

I just wanted a simple will, where everything goes to the survivor, but my husband has been persuaded by the consultant that we need to sever our joint tenancy and create a trust for the deceased’s share on their death, to protect it from care home fees. I’d rather not bother with either of these and if the house has to be sold for care fees when the survivor can no longer live there, so be it.

It sounds like a will writing firm rather than a solicitor is preparing the wills.

Your situation is so simple -

on first death, everything to the survivor;

on second death, estate divided between (whoever you choose).

Gloriwulf

Thank you everyone. This tallies with my thoughts too.

Mojisola

Gloriwulf said:

My husband was offered a free will consult by a firm through his employer. We then paid the firm to draft our wills. 

I don’t have a lot of faith in the consultant; he’s already made several mistakes in the drafting, so I’m considering having the will checked over by a third party. However, as that means expending yet more money (on what was supposed to be a ‘free’ service) I was hoping someone here could do a sense check for me.

It's not uncommon for will writing firms (and some solicitors) to tell you that you need to do things a certain way and then charge you for doing them - severing the joint tenancy, setting up and managing a trust, etc.

Also make sure that they don't add themselves as joint executors.

If you haven't already, think about getting Power of Attorneys done - in some ways these are more important than a will.  You can do them yourselves - no need to pay a professional unless you want to.

Malale

About 50% of the deceased's home equity may be placed in a trust to protect against nursing home payments, but this depends on the specific circumstances.
Yes, if the share is transferred to trust management, then ownership must be transferred to the trustee.
A special agreement or a life interest in the property may be required to allow the surviving spouse to remain in the home. This is a detail that should be discussed with your advisor or lawyer.

Malthusian

Savvy_Sue said:

You may need to identify the niblings, because I have a vague feeling that the default is blood niblings - so I have 6 and DH has none under that scenario, but actually he'd want mine to inherit. 

Your vague feeling is correct; "nieces and nephews" is assumed to mean blood niblings, not niblings-in-law (Re Daoust 1944), unless it is clear that the testator(ix) meant otherwise (Wales v Dixon 2020).

So if your DH wanted those 6 to inherit, he should write "all nephews and nieces of my wife".

As he doesn't have any nephews and nieces of his own, "all of my nephews and nieces" could arguably be interpreted as referring to his niblings-in-law (as the only alternative interpretation is that he was hallucinating the existence of imaginary relatives). But even creating an "arguably" means you have failed at Will writing. 

Savvy_Sue

Malthusian said:

Savvy_Sue said:

You may need to identify the niblings, because I have a vague feeling that the default is blood niblings - so I have 6 and DH has none under that scenario, but actually he'd want mine to inherit. 

Your vague feeling is correct; "nieces and nephews" is assumed to mean blood niblings, not niblings-in-law (Re Daoust 1944), unless it is clear that the testator(ix) meant otherwise (Wales v Dixon 2020).

So if your DH wanted those 6 to inherit, he should write "all nephews and nieces of my wife".

As he doesn't have any nephews and nieces of his own, "all of my nephews and nieces" could arguably be interpreted as referring to his niblings-in-law (as the only alternative interpretation is that he was hallucinating the existence of imaginary relatives). But even creating an "arguably" means you have failed at Will writing. 

Fortunately we have three sons who are lined up before my niblings, and the 'doomsday scenario' is unlikely to happen these days. 

However, just out of interest, would he need to say "all my wife's niblings", or would it be enough to identify them as Archie, Bert and Charlie Brown, and Danny, Egbert and Frannie Smith? 

Of course a half-decent solicitor would check whose niblings they were by blood, and phrase it correctly, and we would of course be using such a solicitor, but it's always good to know when you read a draft will that your assessment of the solicitor as competent was correct ...  

Malthusian

Savvy_Sue said:

However, just out of interest, would he need to say "all my wife's niblings", or would it be enough to identify them as Archie, Bert and Charlie Brown, and Danny, Egbert and Frannie Smith? 

Either is fine for ABCDE&F, but the former option excludes George and Harriet who were born after you wrote the Will.