Financial advisor or solicitor when looking at IHT

ChickenLicken12

I was widowed with two young children. 

I met another chap and we married. 

We bought a house together. 

He kept his former home and another property which he rents out (his pension pot) 

And now we’re looking at wills. 

However, there are some complications with what we want to put in the will with IHT implications so should we see an IFA before seeing the solicitor? 

My estate is the marital home  + £100K savings. 

Marital home goes to hubby, savings to my children. 

Current estate value approx £700k. 

His estate is marital home + property 1 + property 2 

Current estate value £1.4million

Marital home and Property 2 to be left to me
Property 1 is to be left to a relative . 

How will IHT and allowances work : 
a) if I die first?
b) if hubby dies first? 

By leaving Property 1 to the relative does that mean if hubby dies first that uses up his IHT allowance of £325k? 

Should I die second are my children able to use their late Dad’s allowances (everything was left to me as his wife)? 

Or was that negated when I remarried? 

Will a solicitor be able to advise or should we see an IFA in the first instance or someone else ? 

Thank you and hope it makes sense. 

Keep_pedalling

ChickenLicken12 said:

I was widowed with two young children. 

I met another chap and we married. 

We bought a house together. 

He kept his former home and another property which he rents out (his pension pot) 

And now we’re looking at wills. 

However, there are some complications with what we want to put in the will with IHT implications so should we see an IFA before seeing the solicitor? 

My estate is the marital home  + £100K savings. 

Marital home goes to hubby, savings to my children. 

Current estate value approx £700k. 

I am assuming here that he has no children of his own. This is not how I would do this, yes leave any savings to your children, but I would also leave my share of the marital home to my children, with your spouse receiving a life interest in the property. This creates an immediate post death interest trust, which gives your spouse security and protects your children’s inheritance. It is also tax efficient especially it either of your children don’t own their own house yet.

His estate is marital home + property 1 + property 2 

Current estate value £1.4million

Marital home and Property 2 to be left to me
Property 1 is to be left to a relative . 

How will IHT and allowances work : 
a) if I die first?
b) if hubby dies first? 

If you die first, anything left to your spouse or put into a immediate post death interest trust is covered by spousal exemption so only the cash savings would reduce the amount of NRB that would be transferable to your spouses’ estate. None of the transferable RNRB would be used up.

If hubby dies first everything going to you would be exempt, but if property 2 is worth more than £325k then IHT will be payable, and that will have to be paid from the proceeds of the sale of property 2. 

By leaving Property 1 to the relative does that mean if hubby dies first that uses up his IHT allowance of £325k? 

Yes if it is worth that much or more, but his RNRB would still be transferable to your estate. 

Should I die second are my children able to use their late Dad’s allowances (everything was left to me as his wife)? 

Or was that negated when I remarried? 

Your executors can use the transferable NRB and RNRBs from your first husband instead of your current husband, so if you inherited everything from him your estate could claim the full £1M in exemptions if needed.

Will a solicitor be able to advise or should we see an IFA in the first instance or someone else ? 

Thank you and hope it makes sense. 

An IFA is not appropriate here you both need to sit down with a STEP qualified solicitor to draft your wills. 

Emmia

Keep_pedalling said:

ChickenLicken12 said:

I was widowed with two young children. 

I met another chap and we married. 

We bought a house together. 

He kept his former home and another property which he rents out (his pension pot) 

And now we’re looking at wills. 

However, there are some complications with what we want to put in the will with IHT implications so should we see an IFA before seeing the solicitor? 

My estate is the marital home  + £100K savings. 

Marital home goes to hubby, savings to my children. 

Current estate value approx £700k. 

I am assuming here that he has no children of his own. This is not how I would do this, yes leave any savings to your children, but I would also leave my share of the marital home to my children, with your spouse receiving a life interest in the property. This creates an immediate post death interest trust, which gives your spouse security and protects your children’s inheritance. It is also tax efficient especially it either of your children don’t own their own house yet.

His estate is marital home + property 1 + property 2 

Current estate value £1.4million

Marital home and Property 2 to be left to me
Property 1 is to be left to a relative . 

How will IHT and allowances work : 
a) if I die first?
b) if hubby dies first? 

If you die first, anything left to your spouse or put into a immediate post death interest trust is covered by spousal exemption so only the cash savings would reduce the amount of NRB that would be transferable to your spouses’ estate. None of the transferable RNRB would be used up.

If hubby dies first everything going to you would be exempt, but if property 2 is worth more than £325k then IHT will be payable, and that will have to be paid from the proceeds of the sale of property 2. 

By leaving Property 1 to the relative does that mean if hubby dies first that uses up his IHT allowance of £325k? 

Yes if it is worth that much or more, but his RNRB would still be transferable to your estate. 

Should I die second are my children able to use their late Dad’s allowances (everything was left to me as his wife)? 

Or was that negated when I remarried? 

Your executors can use the transferable NRB and RNRBs from your first husband instead of your current husband, so if you inherited everything from him your estate could claim the full £1M in exemptions if needed.

Will a solicitor be able to advise or should we see an IFA in the first instance or someone else ? 

Thank you and hope it makes sense. 

An IFA is not appropriate here you both need to sit down with a STEP qualified solidity to draft your wills. 

STEP qualified solicitor, for clarity.

Keep_pedalling

Emmia said:

Keep_pedalling said:

ChickenLicken12 said:

I was widowed with two young children. 

I met another chap and we married. 

We bought a house together. 

He kept his former home and another property which he rents out (his pension pot) 

And now we’re looking at wills. 

However, there are some complications with what we want to put in the will with IHT implications so should we see an IFA before seeing the solicitor? 

My estate is the marital home  + £100K savings. 

Marital home goes to hubby, savings to my children. 

Current estate value approx £700k. 

I am assuming here that he has no children of his own. This is not how I would do this, yes leave any savings to your children, but I would also leave my share of the marital home to my children, with your spouse receiving a life interest in the property. This creates an immediate post death interest trust, which gives your spouse security and protects your children’s inheritance. It is also tax efficient especially it either of your children don’t own their own house yet.

His estate is marital home + property 1 + property 2 

Current estate value £1.4million

Marital home and Property 2 to be left to me
Property 1 is to be left to a relative . 

How will IHT and allowances work : 
a) if I die first?
b) if hubby dies first? 

If you die first, anything left to your spouse or put into a immediate post death interest trust is covered by spousal exemption so only the cash savings would reduce the amount of NRB that would be transferable to your spouses’ estate. None of the transferable RNRB would be used up.

If hubby dies first everything going to you would be exempt, but if property 2 is worth more than £325k then IHT will be payable, and that will have to be paid from the proceeds of the sale of property 2. 

By leaving Property 1 to the relative does that mean if hubby dies first that uses up his IHT allowance of £325k? 

Yes if it is worth that much or more, but his RNRB would still be transferable to your estate. 

Should I die second are my children able to use their late Dad’s allowances (everything was left to me as his wife)? 

Or was that negated when I remarried? 

Your executors can use the transferable NRB and RNRBs from your first husband instead of your current husband, so if you inherited everything from him your estate could claim the full £1M in exemptions if needed.

Will a solicitor be able to advise or should we see an IFA in the first instance or someone else ? 

Thank you and hope it makes sense. 

An IFA is not appropriate here you both need to sit down with a STEP qualified solidity to draft your wills. 

STEP qualified solicitor, for clarity.

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