Question on Will re IHT

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81890862#Comment_81890862

I not sure I agree that contributing to paying an interest only mortgage ( as a question of law) builds up an equitable stake in the underlying property.

That would certainly be the case for a capital repayment mortgage , but not interest only.

I would have a different view if OP's husband had contributed to the original deposit or later paid for substantial capital improvements to the property to enhance its value.

However it is open to the OP to decide to make an effective gift of equity to her husband in recognition of their long committed relationship, albeit ( it seems ) only via her will at this stage.

However, if she survived her husband would her revised will still make provision for her husband's son in the same way?

Either way IPDI trust is undoubtedly the way to go whether or not it grants her own children 50% or 100% of the property on his death, in the event she predeceases her husband.

Keep_pedalling

Good point

silverwhistle

Just to address your concern about children inheriting in their 60s; is it something they are basing any plans upon? Last year my sister and I inherited from mum at 70/70+, and although something had been on the cards, with nursing home fees as they are nothing was taken for granted.

cici71

https://forums.moneysavingexpert.com/discussion/comment/81891242#Comment_81891242

I know it sounds harsh but I don’t know my husbands son. He was estranged from him since he was 2yrs but met up with him recently as an adult so no I wouldn’t be thinking of him in my will at all.
Did you manage to see my final question to you on our last comment ? You’ve all highlighted so many fantastic things and some I really didn’t know about. I just had one last question before proceeding with getting my Will done regarding the trust I already have in place payable to my husband of £137,000 so if I die before this mortgage runs out in 5yrs, it’ll pay him that for him to pay off the mortgage. Does that still stand if he has a life interest rather than a beneficiary. Thanks

RAS

Can you explain why the insurance pays out to your husband, rather than to the mortgage provider?

What happens if he gets the money and doesn't pay off the mortgage? What happens if he dies first, how do you pay off the mortgage?

Keep_pedalling

You might not have left your stepson anything directly in your will, but you may have done indirectly if your husband has left the bulk of his estate to his son or if he has no will. Do you know who is is leaving his estate too?

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81891423#Comment_81891423

As regards the fixed term protection policy, still makes sense for your husband to be the primary beneficiary since he has a vested interest in ensuring the mortgage is paid off to keep a roof over his head, especially if you change your will to give him just a life interest in the property.

However, given he has not managed to amass savings of his own, and the poor credit history you refer to, you are trusting him to make a rational decision in this regard.

If changing the beneficiary to your sons as an alternative, they may not be quite as motivated to apply it to the mortgage in the same way.

Taking it out of the trust, so the policy falls into your estate still relys on your husband (as executor?) using it for the primary purpose, but with pay out of proceeds delayed pending probate.

In passing, now that you say you have no especial sentiment for your partner's son, it makes even less sense you leaving 50% of the property to your husband, unless you feel he would favour your children over his own son in his own will, in the event you predeceased him.

cici71

https://forums.moneysavingexpert.com/discussion/comment/81891440#Comment_81891440

I guess the thought process was that if he received money in trust, it would mean he could pay off the mortgage and not have to sell the house to pay it off. I didn’t know you could give money to the mortgage provider in a trust and with possible different providers if I changed mortgage provider it just seemed the right thing. If I am giving him the lifetime interest, it would definitely be in his best interests to pay it. If he dies, he has a life insurance policy that would pay out to me. It is enough to pay off the mortgage too with a bit extra.

cici71

https://forums.moneysavingexpert.com/discussion/comment/81891453#Comment_81891453

Yes you’re right and it’s not really til today I’ve realised that!! I just assumed it was the ‘right’ thing to do leaving some of the house to him but as people have said, my estate could end up going to a future spouse!! He hasn’t done a will. I guess he feels it’s unnecessary as he doesn’t own property.

cici71

https://forums.moneysavingexpert.com/discussion/comment/81891471#Comment_81891471

Yes, totally right. All these years I’ve had him as beneficiary unknowingly it could mean my estate falls to a future spouse or his child if he has no will. I am changing this now all thanks to fantastic advice from all of you on here.
I’ll still leave the trust in his name as he will have a vested interest in paying that off as he has the lifetime trust. My children I would worry would not be responsible enough so my husband is the best option. Or should I change it to the mortgage provider? It pays directly to them? I’m not going to change provider in the next few years when it ends. Hopefully if all goes well and 5yrs is up and I’m still here, then the trust will no longer be needed (I’m pretty sure it had an end date that matched the mortgage term), I can check that.