Writing a Will (the estate as opposed to life insurance and pension).

mp203

RAS said:

Please do not go near a will writing company.

You've got a complex family situation, and complex finances.  Your daughter will not thank you if you screw up. You may want to talk to your pension provider about their rules and then go to see a STEP solicitor, who will write your will. 

Get it stored with the government probate service. Anything you leave your daughter has to be held in trust. Do you have another adult in your life who could act jointly with your ex partner? So, there is someone there if anything happens to your ex-partner and someone to share the burden with her?

Thanks.

It wasn't a will writing company I got the £200 quote from (for writing the will), it was a law firm (sorry for the confusion; I didn't know until now that there were will writing companies. I also didn't know if the advisors at the law firm were IFAs etc).
I've since Googled the firm. Turns out there are STEP solicitiors at the firm, and they have 4.7 stars on Trustpilot from 240 reviews).

I was going to have the will stored with the law firm as I thought that was the done thing. But now you mention the govt. probate service I'm having second thoughts. I intend to tell my ex (my daughter's mum, and executor/trustee) where the will is kept. You think the probate service is the better option?

I also intend to list my sister as a backup executor/trustee in case anything happened to my ex; I hadn't thought of listing a co-executor/trustee. I can see the benefits ('share the burden') but I'm wondering if it could make things uncomfortable for my ex (my sibling/s wondering why she is getting something and they aren't; and my ex having to consult/obtain permission from my sister any time she had to do something regards the trust).

Google informs me that my siblings (or anyone other than the executor, my ex) will have a right to see the will before probate; is that correct.

But ANYONE can see the will after probate; is that correct? It becomes a matter of public record, yes? 
How common is it for people to search for a will like that? I'm guessing people who think they might/should have beneficiaries but weren't might want to double check? Or people just being nosey? It makes me feel uneasy that just anyone can get to know your family business like that.

I thought people who weren't executors could only access the will AFTER probate, but it says this on the govt. website;  "For finding a will after a death but before probate see (link)* finding a person’s will." ?

*I, as a newbie, can't post a link

mp203

Savvy_Sue said:

mp203 said:

Savvy_Sue said:

mp203 said:

My daughter is a child (under 18) and I’m writing my will imagining me dying before she turns 18 (if I’m still alive when she turns 18 I can rethink it, and re-write the will if necessary). I want her mum to let the house until my daughter is 18, and then my daughter can take it from there; and my savings won’t cover all of my debts etc, so I’m thinking those will have to be paid for from either my life insurance, or my pension.

<SNIP>

Nb. My daughter’s mum, my ex, has agreed to be the executor, but she doesn’t know the contents of the will. She will also be the trustee. I’ve advised/requested in a separate letter that she keeps the house for my daughter until she is 18, and uses the pension to settle the debts etc. And that I wish for her to receive the money from my life insurance policy.

You say you want your ex to rent the house out on behalf of your daughter. IMO that's a big ask, with all the responsibilities of being a landlord these days, and it can go terribly wrong. It appears to be in a Letter of Wishes rather than the will itself, so it's not binding, but still. 

And personally I can't quite follow the logic. If it's being let out, it won't be 'your daughter's home' any more: someone else will be living there. And it may be quite painful for her to see someone else making changes to it, when it's still 'her house', but she has no control over it until she's 18. 

Also do consider whether it's a suitable house for letting out: in good repair, in the right area, with a decent rental market around. If it's not, don't do it!

Thanks.

I appreciate that it's a big ask but it's for the benefit of our daughter and her mum loves her so I think she would be ok with it. But as you said it is only a wish of mine; if he mum felt it was too much I wouldn't mind her selling the property and banking the proceeds for our daughter. 

As for it being painful for my daughter to see someone else living there, making changes etc; I've asked her mum, in a letter (to be seen with the Will), not to tell my daughter of her inheritance until she is 18. So she won't know anything about it until then. Once she turns 18 she can think about selling it, continuing to let it, or living in it herself (if possible, given the tenancy etc).

Regards suitable for letting etc. Yes, thanks, its in good repair, the right area, decent rental market around, etc. But, I'll leave that to her mum's discretion, judgement. It will just be a wish of mine.

I do wonder if you're overthinking this, and trying to see into the future and control it. 

I don't know how old your DD is at the moment, but I think that at some point before the age of 18 she might be curious about you, what you may have left her, what happened to your house etc etc etc. 

What's her mum going to do then? 

Another thought: your DD can't own a house before she's 18, so some sort of trust would need to be set up. I don't know whether having a house left to you 'in trust' affects the FTB status, but I'm pretty sure that the moment she was the owner, she'd lose that status, and she'd lose it forever - ie even if she sold the home, she still wouldn't get any of the FTB benefits. 

Of course we don't know what they'll be worth when that time comes, but there are complications. 

Thanks.

I guess I am trying to see into the future, but not control it, as such; just let my ex know my wishes, but trust her to use her discretion. Overthinking it? Maybe. It's all new to me.

Regards my daughter getting curious about the house etc, as she gets older; I don't think it will be difficult for Mum to tell her a few white lies. "The house was sold to clear the mortgage and other debts and expenses. There is some money, left over from the sale, in trust for you, for when you turn 18."

As for the FTB status; that's something I didn't think of. I will ask the solicitor about that and weigh everything up. In the end I might just forget the idea of the property being let, etc.

mp203

poseidon1 said:

mp203 said:

msb1234 said:

Who’s going to pay for the upkeep of your house until your daughter is 18? Also, she will lose any first time buyer status if the house isn't sold. You’re assuming here that she’d want to keep the house - she very well may not. This will impact her financially when she wants to buy another property. 

I suppose you have your reasons for handing over a substantial sum of money to your ex instead of all your estate going to your daughter - it seems a bit odd though. Your debts will have to be settled before your estate is distributed - leaving your life insurance to your ex means that it would not be able to be used to pay off your debts. The house would have to be sold to pay the mortgage. In addition, if your ex got married, her husband would be entitled to half of that money. 

The simplest thing to do is leave your estate in its entirety to your daughter. 

Thanks.

I'm hoping my ex (my daughter's mum) will look after the house until my daughter is 18. She will be the trustee and, if necessary, can use the money in the estate. Once my debts are settled there will be some left over for my daughter. But I'm hoping she will let the property so there will be an income rather than it being a net expense.

As for my daughter losing first time buyer status; I don't know much about that. I will look into it, thanks. In the meantime, one question on that; Might the rental income (up until she is 18) being put away for her, outweigh any potential gain from first time buyer status? Also, I'm thinking that if her mum does let the property for her, and then, when she turns 18, she continues to let it, she could have that rental income for longer.

Regards leaving me ex the insurance money. I did wonder if that was unusual. But I think she deserves it. And my daughter gets the property and the balance fo the pension money once the debts are paid (if I can work it that way).

As for the house having to be sold to pay the debts and expenses. Yes, that is a concern. But why can't the pension money be used to pay the debts etc?

Regards my ex getting married. She is already as good as married and I'm happy for her partner to benefit from her inheritance.

I know it would be simpler to leave the entire estate to my daughter but I do want to leave something to her mum.

You have provided some useful additional background information to which I will respond.

* I concur with RAS and Keep_pedalling, do not use a will writing firm for the drafting of your will, frankly if I had my way that particular industry would be banned as causing far more harm than good. Find a STEP qualified lawyer.

* As for the will itself, you will be establishing a Bereaved Minors Trust for your daughter the main provisions of which she will be entitled to the income until age 18 at which point she becomes absolutely entitled to the capital and the trust ends. See link below for an explanation of how this works ( this is not an endorsement to use Irwin Mitchell by the way!). Presumably you will also be naming your ex as legal guardian if she does not already have custody of your daughter?


* If your  ex partner chooses to retain the property as an ongoing investment for the trust (rather than sell it), this will mean your daughter losing first time buyer's status for future SDLT purposes. Don't worry about it. She will have potential access to your home for her own use, or the sale proceeds thereof ( less CGT if any  )  would put her in a cash purchaser position far more beneficial than the majority of young people her age, notwithstanding losing FTB status. As for the trust itself the net income will be liable to tax at 20%, but with some or all of this recoverable on your daughter's behalf depending on her personal allowance at that time.

* As regards your DC pension pot, your expression of wish letter should direct the pension scheme trustees to pay the accumulated pot to the trust fund established under your will.  Your partner will have power to use part of the cash to pay off the mortgage and any other debts at death , leaving any remaining cash to add to the trust of the house( if not sold). The STEP lawyer will advise on suitable wording  for the EOW letter.

* Can't see a problem with directing the life policy into a separate trust for your partner given the circumstances you have outlined. However, I reiterate getting a suitable trust form from your insurance company for the purpose. It is all standard procedure from the life company's point of view. In fact its a shame more people don't do  this as a matter of good practice with their standalone life policies,  for  IHT /probate avoidance purposes. 

* I can't see you have ever mentioned your current employment status and whether you have death in service cover ( a multiple of your current salary ). If so, this would be in addition to your DC pension pot, and you should also have a suitable expression of wish letter in place covering those separate monies.

Hopefully you will continue to survive long after your daughter attains age 18. If so, you rip up this 'will trust' and establish a far simpler arrangement gifted direct to your daughter for her to deal with personally with the guidance of your ex. This will trust is just a stop gap arrangement until then.

 As for the life policy ( in trust for your ex) , is this permanent life cover payable whenever you may die or cover for a fixed term of years?  If merely term cover, you may need to think how else to benefit your ex in future, if/when policy expires with no value.

Thanks a lot, for such a comprehensive reply.

I won't be using a will wrting company. I will use STEP solicitors.

My ex is already legal guardian.

I will weigh up the pros and cons regards FTB status v rental income etc with the solicitor.

I'll instruct the pension company to pay out to the will's trust fund.

I'm thinking now I might just forget about the property being let, so it will be sold as a matter of course. Then leave my ex a sum from the estate with the balance (after debts and expenses) going to my daughter. And the pension and insurance going to the will's trust fund.

I am unemployed due to ill health at the moment. I doubt I will return to work before retirement.

Thanks again.

RAS

If you read round this forum, you'll discover that the only people entitled to see a will prior to probate are the executors. It's a regular beef. Even if they are beneficiaries, people aren't entitled to information from the executors until probate is granted and the estate is distributed. Residuaries are entitled to estate accounts but no-one else.

And everyone can get a copy of the will once granted.

The issue with using lawyers to store your will is that some fail, some are closed down, and their paperwork is transferred to other companies. First, contact the Law Society to find out who should have the paperwork. Then hope they can find your bit.

There was a case here recently where the new company hadn't even indexed the papers they'd received so had no idea if they had the will which the descendants believed the the donor has left with the firm who wrote the will. Intestacy was going to be a odds with what they believed was in the will.......

The probate registry takes 3 weeks to send a will, so longer than a surviving local firm with on site storage. But probably a lot quicker than one trying to find stuff they inherited in off-site storage.

P.S. If you ask your sister to be executor, she's entitled to expenses only. Maybe leave her a small sum, dependant on her involvement?

Linton

You can’t rely on your pension being used to pay off your mortgage. The final decision of where your pension goes is made by the pension trustees. They would normally follow the expression of wishes as to who should receive the pot but I can’t see them accepting the one-off admin job of dealing with your mortgage lender. 

The mortgage is a debt.  The executor should clear all debts from the estate before the estate is distributed to the beneficiaries. I think you are making things far too complicated. As other have said, talk to a solicitor.

mp203

Linton said:

You can’t rely on your pension being used to pay off your mortgage. The final decision of where your pension goes is made by the pension trustees. They would normally follow the expression of wishes as to who should receive the pot but I can’t see them accepting the one-off admin job of dealing with your mortgage lender. 

The mortgage is a debt.  The executor should clear all debts from the estate before the estate is distributed to the beneficiaries. I think you are making things far too complicated. As other have said, talk to a solicitor.

Thanks.

I hear what you're saying about the pension, although I wasn't hoping that the pension company would deal with my mortgage directly; I was hoping that they would pay the money to my estate (which is effectively paying it to my daughter as she inherits my estate) and from there it would go towards paying off my mortgage, other debts, and expenses.

I also get that I'm making it complicated, but for good reasons, I think. How else could I do it (or hope to do it) without the property having to be sold to pay the debts etc? It seems strange, and perhaps unnecessarily so, that if I want my property to be let until my daughter is 18, and I'm leaving enough money to clear my debts etc, albeit it in the form of my pension, I wouldn't be able to do this because a pension company won't agree to the simple request of paying my pension to my estate.

As an aside; is it common, uncommon, very uncommon, for a testator to leave a property with the wish that it is let until the beneficiary comes of age?

poseidon1

mp203 said:

Linton said:

You can’t rely on your pension being used to pay off your mortgage. The final decision of where your pension goes is made by the pension trustees. They would normally follow the expression of wishes as to who should receive the pot but I can’t see them accepting the one-off admin job of dealing with your mortgage lender. 

The mortgage is a debt.  The executor should clear all debts from the estate before the estate is distributed to the beneficiaries. I think you are making things far too complicated. As other have said, talk to a solicitor.

Thanks.

I hear what you're saying about the pension, although I wasn't hoping that the pension company would deal with my mortgage directly; I was hoping that they would pay the money to my estate (which is effectively paying it to my daughter as she inherits my estate) and from there it would go towards paying off my mortgage, other debts, and expenses.

I also get that I'm making it complicated, but for good reasons, I think. How else could I do it (or hope to do it) without the property having to be sold to pay the debts etc? It seems strange, and perhaps unnecessarily so, that if I want my property to be let until my daughter is 18, and I'm leaving enough money to clear my debts etc, albeit it in the form of my pension, I wouldn't be able to do this because a pension company won't agree to the simple request of paying my pension to my estate.

As an aside; is it common, uncommon, very uncommon, for a testator to leave a property with the wish that it is let until the beneficiary comes of age?

These are now details to be discussed with the appropriate STEP qualified lawyer including the drafting of an appropriate EOW to the pension scheme trustees directing the lump sum into the Bereaved Minors Trust.

A point of clarification with regard to costs of this excercise. 

Although your estate is modest in size, your requirements on your daughter's behalf are complex.

 As a result it is inconceivable that the Will  drafting  together with ancilliary EOW drafting to the pension scheme trustees, will cost the mere £200 you quoted.   It won't, £200 is for a very simple will devoid of any detailed trust provisions.   Your current costs expectation is entirely unrealistic assuming this work is in fact to be undertaken by a STEP specialist.  Accordingly I am sceptical that a STEP lawyer actually quoted £200 with full  knowledge of the complex trust provisions you have in mind. 

Savvy_Sue

mp203 said:

As an aside; is it common, uncommon, very uncommon, for a testator to leave a property with the wish that it is let until the beneficiary comes of age?

I'd say it was increasingly uncommon, because being a landlord is not for the fainthearted. Plus the private rental market is a lot larger than when I was young, when you either lived in a council house or bought your own (NOT right to buy!) - so actually owning a house was far less common, and owning to rent it out would have been quite unusual. That at least is my perception. 

mp203

poseidon1 said:

mp203 said:

Linton said:

You can’t rely on your pension being used to pay off your mortgage. The final decision of where your pension goes is made by the pension trustees. They would normally follow the expression of wishes as to who should receive the pot but I can’t see them accepting the one-off admin job of dealing with your mortgage lender. 

The mortgage is a debt.  The executor should clear all debts from the estate before the estate is distributed to the beneficiaries. I think you are making things far too complicated. As other have said, talk to a solicitor.

Thanks.

I hear what you're saying about the pension, although I wasn't hoping that the pension company would deal with my mortgage directly; I was hoping that they would pay the money to my estate (which is effectively paying it to my daughter as she inherits my estate) and from there it would go towards paying off my mortgage, other debts, and expenses.

I also get that I'm making it complicated, but for good reasons, I think. How else could I do it (or hope to do it) without the property having to be sold to pay the debts etc? It seems strange, and perhaps unnecessarily so, that if I want my property to be let until my daughter is 18, and I'm leaving enough money to clear my debts etc, albeit it in the form of my pension, I wouldn't be able to do this because a pension company won't agree to the simple request of paying my pension to my estate.

As an aside; is it common, uncommon, very uncommon, for a testator to leave a property with the wish that it is let until the beneficiary comes of age?

These are now details to be discussed with the appropriate STEP qualified lawyer including the drafting of an appropriate EOW to the pension scheme trustees directing the lump sum into the Bereaved Minors Trust.

A point of clarification with regard to costs of this excercise. 

Although your estate is modest in size, your requirements on your daughter's behalf are complex.

 As a result it is inconceivable that the Will  drafting  together with ancilliary EOW drafting to the pension scheme trustees, will cost the mere £200 you quoted.   It won't, £200 is for a very simple will devoid of any detailed trust provisions.   Your current costs expectation is entirely unrealistic assuming this work is in fact to be undertaken by a STEP specialist.  Accordingly I am sceptical that a STEP lawyer actually quoted £200 with full  knowledge of the complex trust provisions you have in mind. 

Thanks.
Why would I need to pay the solictior to draft an EOW to the pension scheme? Can't I do that myself; simply write to them asking to pay the lump sum into the BMTrust (as it stands they have been directed to pay out to my daughter anyway). I'm assuming that if I died without sending the EOW it would go into the BMTrust anyway, as I'm not, nor have I ever been married, and I only have one child; is that correct?
And although my wishes are slightly complicated the Will itself won't be. It will simply state; "My estate goes to my daughter. Her mum is the executor and trustee."
The other stuff will be in a letter of wishes to my ex, the EOW to the pension scheme, and an EOW (if that is the correct term) to the insurance company.
I was told by the solicitors that I can put my letter of wishes, and personal letters to those I leave behind, in beside my Will (in their safe? in their files somewhere? But not IN THE WILL, obviously) which the solicitors will keep together (but none of the letters are legally binding they reminded me) at no extra cost. Having said that, I'm now considering having the govt. probate service look after the Will (after the advice given above).

mp203

Savvy_Sue said:

mp203 said:

As an aside; is it common, uncommon, very uncommon, for a testator to leave a property with the wish that it is let until the beneficiary comes of age?

I'd say it was increasingly uncommon, because being a landlord is not for the fainthearted. Plus the private rental market is a lot larger than when I was young, when you either lived in a council house or bought your own (NOT right to buy!) - so actually owning a house was far less common, and owning to rent it out would have been quite unusual. That at least is my perception. 

Thanks.
I get that being a regular landlord is not for the fainthearted, where your living depends upon it. But I'm thinking that it won't be a major undertaking in this case. I'm thinking my ex can more or less hand it over to a letting agency and bank the income. Yes, there are bound to be some issues here and there, and there may be some periods when it is not let, but she won't be dependent on the rental income (minus agency fees etc), she will be merely putting any income into the BMTrust for her daughter. In fact she won't even have to do that presumably, if it can go into the trust directly from the agency. And it wouldn't be for that long a period as our daughter is now a teenager.
Also, it will just be a wish of mine; ultimately it will be up to my ex. And I'm ok with the thought of her deciding to sell and be done with it, if she thought it might be too much work/hassle.