Legitim (Legal Rights) and Transferrable NRB

DukeWookie

In Scotland and trying to figure out what NRB can get transferred to a Wife based on 2 scenarios.

Husband's will is about £270000, leaving everything to wife, plus £10000 to grandkids, roughly £10000 in PET's.

Scenario 1. 3 Children claim legal rights

Scenario 2. Don't claim legal rights.

Any help appreciated, and also is children claiming legal rights a common thing?

Keep_pedalling

Where no LR are claimed it is simple £20k (6.15%) has been used

If LR are claimed you need to be a bit more specific, of the £270k how much of it solely owned movable estate (cash, savings ect) land and property are not covered by LR neither are joint assets. 

DukeWookie

The £270000 is made up of bank accounts and isas, unit trusts. Didn't mention house, but it's survivorship to wife.

Keep_pedalling

DukeWookie said:

The £270000 is made up of bank accounts and isas, unit trusts. Didn't mention house, but it's survivorship to wife.

Then if the claim is made 1/3rd goes to the children using up a further 22% of the transferable NRB. Not sure how that would interact with the bequest to the grandchildren however perhaps @buddy9 would like to comment on that.

Overall though it makes little difference to any IHT liability on the surviving spouse’s estate as the reduction in transferable NRB is offset in a similar reduction in the size of her estate. 

buddy9

Legitim is an entitlement which is often renounced as a family decision or to enable the claim of a legacy. Perhaps more likely to be claimed in blended families or estranged families.

(Where intestacy, legitim is a normal part of estate distribution).

With a moveable estate of £270,000 and a surviving spouse, children have a legitim entitlement to 1/3rd - £90,000. So if claimed by all children, £110,000 (90k+10k+10k) of NRB is used up and £215,000 of TNRB available (on current values). This is a simplification which roughly shows the quantum, in practice legitim is an entitlement applied to the available net moveable estate.

A gift by will to grandchildren should not alter legitim entitlement if their relevant parent is still alive at the time.