Intestate Estate - How to deal with property, savings, work benefits?

aliby21

GoogleMeNow said:

Thanks Marcon.  We have pointed them towards getting qualified and crucial advice.  Unfortunately, they think they know best and will most certainly not pay for a professional to tell them anything they don't already know (hmmm).  According to the father, the law is an A.S.S.  At the end of the day, it doesn't really matter what advice we can give them, they will do whatever they want to.  Looks like sibling (my husband) will be paying a huge IHT bill on their passing (both in their 80s in very poor health)

I think the IHT bill is going to be the least of his worries, if parents let the partner carry on living in the house in some ad hoc fashion it could all get very complicated when parents do pass.

GoogleMeNow

aliby21 said:

GoogleMeNow said:

Thanks Marcon.  We have pointed them towards getting qualified and crucial advice.  Unfortunately, they think they know best and will most certainly not pay for a professional to tell them anything they don't already know (hmmm).  According to the father, the law is an A.S.S.  At the end of the day, it doesn't really matter what advice we can give them, they will do whatever they want to.  Looks like sibling (my husband) will be paying a huge IHT bill on their passing (both in their 80s in very poor health)

I think the IHT bill is going to be the least of his worries, if parents let the partner carry on living in the house in some ad hoc fashion it could all get very complicated when parents do pass.

The parents are not bothered though.  That will be our problem to deal with, not theirs.  Hence the reason I wanted to know what we are going to be letting ourselves in for and if there was any point in trying to 'suggest' alternatives for the parents to do now.  They certainly won't seek professional advice but they might just accept some advice from us, providing we don't make them feel like their son is advising them purely for his own benefit.

Marcon

GoogleMeNow said:

Marcon said:

GoogleMeNow said:

Thanks everyone for your comments and advice.

To answer as best I can:

I have since found out that there is no mortgage on the property.

We have broached the subject of doubt IHT on the parents inheriting the whole lot and then, again being subject to IHT on their deaths.  However, the father's stance is that he is happy to pay IHT on the estate and basically doesn't care that there will be another IHT amount due when they pass (as it won't be 'their problem').  

The daughter did not nominate anyone to benefit from her pension, nor her death-in-service lump sum.

The parents want to help the boyfriend as he was financially dependent on their daughter and had lived in her property for the last 8 years.  They have no idea what being a landlord involves.  

The parents have told the son that he will benefit from their Will when they pass and will get the daughter's share at that time (therefore, he doesn't need to benefit from her estate now).

So, if parents go ahead with themselves inheriting the whole estate, would it be advisable to transfer (or assent) the property to their own names or leave it in the daughter's name?  Would they have to pay the additional stamp duty (+3%) for the additional property?

There is clearly plenty of money in the estate to pay for professional advice. I appreciate you are trying to help, but setting yourself up as some sort of properly informed source, when you appear to be relying on random strangers for your 'information', is a high speed route to trouble.

Just point them towards getting qualified and (crucial!) advice from someone who is insured to give it.

Thanks Marcon.  We have pointed them towards getting qualified and crucial advice.  Unfortunately, they think they know best and will most certainly not pay for a professional to tell them anything they don't already know (hmmm).  According to the father, the law is an A.S.S.  At the end of the day, it doesn't really matter what advice we can give them, they will do whatever they want to.  Looks like sibling (my husband) will be paying a huge IHT bill on their passing (both in their 80s in very poor health)

You (or more accurately the estate) only have to pay a 'huge IHT bill' if there's a huge estate, so even it comes to that, your husband is still going to benefit from a handsome inheritance, assuming of course that the lot hasn't been swallowed up in care home costs.

As the law stands, if one parent leaves their whole estate to the other, there's no IHT. On the second death there will be two lots of IHT nil rate available ie £325,000 x 2 = £650,000. If the estate is worth no more than £2m*, there will also be two lots of residence nil rate band if the property is left to a direct descendant on the second death - ie £175,000 x 2 = £350,000. Add up the numbers and there's a potential inheritance of £1m free of IHT.
 
*See https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band for what happens if it's worth more than that.

The daughter was on a six-figure salary but either thought she would live forever (many do!), or didn't really care what happened to her hard-earned possessions when she died. She didn't want to make her boyfriend homeless, but nor did she (apparently) want him to inherit the place which had been his home for some years. She didn't make a will, or even fill in the simple expression of wish forms which would have guided the trustees of the life cover scheme (£400K) and her workplace pension (possibly also substantial, given her salary) as to who should benefit. 

She may have told her brother he'd 'inherit everything' but certainly didn't take any steps to ensure that would be the case. I wonder what she told her boyfriend?

With all the above in mind, maybe a way forward is to focus on what these elderly, stubborn and grieving parents actually want to achieve - and what the boyfriend's expectations are. It's going to be a painful conversation, not least because elderly people in poor health are often unenthusiastic about discussing something which highlights their own mortality.

There is nothing to stop your husband getting his own legal advice beforehand. Relying on the internet isn't a sensible option when things are as complex and high-value as this. Yes, it'll cost him, so it's his call as to whether that is money well spent.

Keep_pedalling

Your husband’s parents do at least seem genuinely concerned about the partner, do you and your husband have a good relationship with him? 

GoogleMeNow

Marcon said:

GoogleMeNow said:

Marcon said:

GoogleMeNow said:

Thanks everyone for your comments and advice.

To answer as best I can:

I have since found out that there is no mortgage on the property.

We have broached the subject of doubt IHT on the parents inheriting the whole lot and then, again being subject to IHT on their deaths.  However, the father's stance is that he is happy to pay IHT on the estate and basically doesn't care that there will be another IHT amount due when they pass (as it won't be 'their problem').  

The daughter did not nominate anyone to benefit from her pension, nor her death-in-service lump sum.

The parents want to help the boyfriend as he was financially dependent on their daughter and had lived in her property for the last 8 years.  They have no idea what being a landlord involves.  

The parents have told the son that he will benefit from their Will when they pass and will get the daughter's share at that time (therefore, he doesn't need to benefit from her estate now).

So, if parents go ahead with themselves inheriting the whole estate, would it be advisable to transfer (or assent) the property to their own names or leave it in the daughter's name?  Would they have to pay the additional stamp duty (+3%) for the additional property?

There is clearly plenty of money in the estate to pay for professional advice. I appreciate you are trying to help, but setting yourself up as some sort of properly informed source, when you appear to be relying on random strangers for your 'information', is a high speed route to trouble.

Just point them towards getting qualified and (crucial!) advice from someone who is insured to give it.

Thanks Marcon.  We have pointed them towards getting qualified and crucial advice.  Unfortunately, they think they know best and will most certainly not pay for a professional to tell them anything they don't already know (hmmm).  According to the father, the law is an A.S.S.  At the end of the day, it doesn't really matter what advice we can give them, they will do whatever they want to.  Looks like sibling (my husband) will be paying a huge IHT bill on their passing (both in their 80s in very poor health)

You (or more accurately the estate) only have to pay a 'huge IHT bill' if there's a huge estate, so even it comes to that, your husband is still going to benefit from a handsome inheritance, assuming of course that the lot hasn't been swallowed up in care home costs.

As the law stands, if one parent leaves their whole estate to the other, there's no IHT. On the second death there will be two lots of IHT nil rate available ie £325,000 x 2 = £650,000. If the estate is worth no more than £2m*, there will also be two lots of residence nil rate band if the property is left to a direct descendant on the second death - ie £175,000 x 2 = £350,000. Add up the numbers and there's a potential inheritance of £1m free of IHT.
 
*See https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band for what happens if it's worth more than that.

The daughter was on a six-figure salary but either thought she would live forever (many do!), or didn't really care what happened to her hard-earned possessions when she died. She didn't want to make her boyfriend homeless, but nor did she (apparently) want him to inherit the place which had been his home for some years. She didn't make a will, or even fill in the simple expression of wish forms which would have guided the trustees of the life cover scheme (£400K) and her workplace pension (possibly also substantial, given her salary) as to who should benefit. 

She may have told her brother he'd 'inherit everything' but certainly didn't take any steps to ensure that would be the case. I wonder what she told her boyfriend?

With all the above in mind, maybe a way forward is to focus on what these elderly, stubborn and grieving parents actually want to achieve - and what the boyfriend's expectations are. It's going to be a painful conversation, not least because elderly people in poor health are often unenthusiastic about discussing something which highlights their own mortality.

There is nothing to stop your husband getting his own legal advice beforehand. Relying on the internet isn't a sensible option when things are as complex and high-value as this. Yes, it'll cost him, so it's his call as to whether that is money well spent.

Thank you for your advice.  You are correct in everything you say.  Unfortunately, the daughter didn't take steps to ensure her wishes were carried out.  She had mentioned her expression of wishes verbally, but if she had written them down, we cannot find them.  It may be filed on her computer, but we haven't been able to access it.

GoogleMeNow

Keep_pedalling said:

Your husband’s parents do at least seem genuinely concerned about the partner, do you and your husband have a good relationship with him? 

Yes, we do have a good relationship with him.  We, as a family, are in agreement that he shouldn't be homeless. I think what has been the sticking point, is that the parents are changing their mind from day to day over whether to gift him the property entirely (which is the majority of the value of the estate), or whether to let him live there indefinitely as a tenant.  Don't believe they have discussed this with him yet.

Savvy_Sue

GoogleMeNow said:

Keep_pedalling said:

Your husband’s parents do at least seem genuinely concerned about the partner, do you and your husband have a good relationship with him? 

Yes, we do have a good relationship with him.  We, as a family, are in agreement that he shouldn't be homeless. I think what has been the sticking point, is that the parents are changing their mind from day to day over whether to gift him the property entirely (which is the majority of the value of the estate), or whether to let him live there indefinitely as a tenant.  Don't believe they have discussed this with him yet.

Has anyone considered how they'd feel about him moving a new girlfriend in? Or asked if he WANTS to stay there? You said, I think, that there were ups and downs in the relationship, he may want to move on. 

GoogleMeNow

Savvy_Sue said:

GoogleMeNow said:

Keep_pedalling said:

Your husband’s parents do at least seem genuinely concerned about the partner, do you and your husband have a good relationship with him? 

Yes, we do have a good relationship with him.  We, as a family, are in agreement that he shouldn't be homeless. I think what has been the sticking point, is that the parents are changing their mind from day to day over whether to gift him the property entirely (which is the majority of the value of the estate), or whether to let him live there indefinitely as a tenant.  Don't believe they have discussed this with him yet.

Has anyone considered how they'd feel about him moving a new girlfriend in? Or asked if he WANTS to stay there? You said, I think, that there were ups and downs in the relationship, he may want to move on. 

These are all thoughts that I and husband have been considering.  Unfortunately, the parents haven't considered them and it is they who are administering the estate.  We are trying to advise them as best we can to make them think and consider the consequences of their actions, but the father is not very amenable to listening to anybody else's point of view. 

The boyfriend has already said that he doesn't know (yet) how he feels about living there.  At the moment it is still very raw and he is grieving, as are we all.

The mother had a stroke a couple of months ago and cannot concentrate or take in much of what we tell her. 

I started this thread to merely gather information with which to present to them for consideration. I am not trying to take the place of a legally qualified professional, just wanted them to think about the situation from a legal point of view and not make silly decisions which they might regret.

We have already advised that they pay a solicitor for some advice, but they believe all solicitors are only out for making money for themselves.  It is pointless trying to convince them otherwise.  

We are aware that there will still be a substantial inheritance to probably come to my husband in the future (barring all care home costs etc), but even people with substantial estates want to make good decisions regarding estate planning.

Marcon

GoogleMeNow said:

Savvy_Sue said:

GoogleMeNow said:

Keep_pedalling said:

Your husband’s parents do at least seem genuinely concerned about the partner, do you and your husband have a good relationship with him? 

Yes, we do have a good relationship with him.  We, as a family, are in agreement that he shouldn't be homeless. I think what has been the sticking point, is that the parents are changing their mind from day to day over whether to gift him the property entirely (which is the majority of the value of the estate), or whether to let him live there indefinitely as a tenant.  Don't believe they have discussed this with him yet.

Has anyone considered how they'd feel about him moving a new girlfriend in? Or asked if he WANTS to stay there? You said, I think, that there were ups and downs in the relationship, he may want to move on. 

These are all thoughts that I and husband have been considering.  Unfortunately, the parents haven't considered them and it is they who are administering the estate.  We are trying to advise them as best we can to make them think and consider the consequences of their actions, but the father is not very amenable to listening to anybody else's point of view. 

The boyfriend has already said that he doesn't know (yet) how he feels about living there.  At the moment it is still very raw and he is grieving, as are we all.

The mother had a stroke a couple of months ago and cannot concentrate or take in much of what we tell her. 

I started this thread to merely gather information with which to present to them for consideration. I am not trying to take the place of a legally qualified professional, just wanted them to think about the situation from a legal point of view and not make silly decisions which they might regret.

We have already advised that they pay a solicitor for some advice, but they believe all solicitors are only out for making money for themselves.  It is pointless trying to convince them otherwise.  

We are aware that there will still be a substantial inheritance to probably come to my husband in the future (barring all care home costs etc), but even people with substantial estates want to make good decisions regarding estate planning.

Indeed.

You started this thread by saying the daughter had died 'recently', so possibly just waiting a short while until some of the rawest edges of the grief have subsided a little might be no bad idea. That's going to leave the boyfriend in limbo, but as it's clear he isn't going to be thrown out on his ear, he might possibly appreciate the breathing space to consider how he feels?

Marcon

GoogleMeNow said:

Unfortunately, the daughter didn't take steps to ensure her wishes were carried out.  She had mentioned her expression of wishes verbally, but if she had written them down, we cannot find them.  It may be filed on her computer, but we haven't been able to access it.

Just to come back on this point...it may not be on her computer at all.

If nobody has yet done so, the starting point is to check with the employer (re DIS) and the pension provider (assuming this is some sort of group personal pension arrangement) whether they have her expression of wish forms. Completed and signed EOW forms are normally held by employers/trustees/pension providers