No Will - share out instead?

rumandcoke

I intend to move in with my Daughter. My Estate value does not attract IHT as it is below the £325k threshold. Is there any legal reason why I cannot give my Children, Grand Children (all adults) and two great grand children ( ages 7 & 5) the monies I wish them to have, now? My gt grand children have Bank Accounts in their names to which I have been paying a small monthly standing order into since they were born. Assuming I can do the above, and the complexity of Trusts etc, could I increase the Amount of the Standing Order each month to ensure they get their share? I will be keeping a large sum back to cover any potential care costs for myself, but again, if there was money left when I pass should I make a will saying who should get it? This is awkward as I obviously have no prior knowledge of what will be left.  

Voyager2002

No-one can know exactly how much money they will have when they die, and so usually a will says how their money will be shared out between different people (for example, 25 per cent to each grandchild).

There is of course nothing to stop you from making cash gifts now. If you give away the house in which you live, then the situation becomes rather complicated, and I suggest you take legal advice before doing such a thing. Perhaps the only complication from giving away cash is that if, at some point in the future, you run out of money and need your council to pay for your care, they might claim that you still have the money that you have given away.

poppystar

Yes, do make a Will. No one knows how much they will leave but you can use percentages which will apply to whatever is left in your estate.

You say you are keeping enough back for care costs but this is not a large estate given your figures and care costs can be very high. If you can’t meet those costs then it could be considered that you have deliberately not left enough money for them and no one will pay them for you - deliberate deprivation of assets. 

Olinda99

Advantage of making a will is that you get to appoint your own choice of executor

But yes you can give away as much as you want now without any tax implications as your estate is below the IHT threshold

Brie

You can avoid being accusing of deprivation of assets if you are making regular gifts from your income.  So if you are getting monthly pension payments and taking half of that and splitting it between the kids/grandkids/etc then you should be ok.  The crucial thing is that it's from income (not from selling your house) and that it's regular and therefore a regular affordable expense for you.

This website (picked at random) seems to cover the details of how this works.

Gifts out of surplus income - Three rules to remember – HW Fisher

Assuming your home is being sold and is worth perhaps £300k then you would need to have at least £4k a month for a mediocre care home.  So your money might last about 6 years.  

rumandcoke

poppystar said:

Yes, do make a Will. No one knows how much they will leave but you can use percentages which will apply to whatever is left in your estate.

You say you are keeping enough back for care costs but this is not a large estate given your figures and care costs can be very high. If you can’t meet those costs then it could be considered that you have deliberately not left enough money for them and no one will pay them for you - deliberate deprivation of assets. 

Thanks. Yes I am aware of everything you have mentioned

Linton

Brie said:

You can avoid being accusing of deprivation of assets if you are making regular gifts from your income.  So if you are getting monthly pension payments and taking half of that and splitting it between the kids/grandkids/etc then you should be ok.  The crucial thing is that it's from income (not from selling your house) and that it's regular and therefore a regular affordable expense for you.

This website (picked at random) seems to cover the details of how this works.

Gifts out of surplus income - Three rules to remember – HW Fisher

Assuming your home is being sold and is worth perhaps £300k then you would need to have at least £4k a month for a mediocre care home.  So your money might last about 6 years.  

I think you may be confusing two quite different things. Gifts From Income potentially reduces your inheritance tax. It does not stop the council from regarding the gifts as deprivation of assets and so could make an assessment of your wealth as if the gifts had not been made.

madbadrob

I think most points have been covered in relation to deprivation of assets should you need LA assistance in the future.  Now you say that your estate will fall below IHT levels?  I dont want this to sound like im being nasty but what crystal ball have you got and can you get me the lottery numbers.  You are assuming that the governments between now and your passing do not change the IHT threshold.  They could if they so wish say that IHT is reduced to the first 25k.  Id therefore re-consider your ideas and maybe just leave a will detailing what each of your grandchildren and children are to receive on death.  

Now as for the monies being paid into the grandchildrens accounts.  So long as the money is not large amounts a month it is unlikely although possible than an LA would consider this DOA but again thats using todays rules and not what they may be down the line

Rob