The Great Planning for Death Hunt

Strapped

crossleydd42 wrote: »

One point about leaving bequests in Wills. Rather than deliberately and pointedly snubbing/cutting family members out of a Will completely and risk expensive litigation afterwards, it is better to leave them nominal amounts which weakens any case they might make that they were forgotten or left out in some vindictive act.

I was advised this in respect of my stepdaughter - it never occured to me that she would expect to inherit from me in the first place, but apparently it's a good idea?

the-chauffeur_2

A couple of things while I think of them . . .

Wills

Wills don't need to be technical or complicated documents (and for the sake of administration of your estate, the simpler the better), but make one. Quite apart from the fact that they will ensure what you leave goes where you want it to, if you die intestate - without having made a will - the state, or to be more precise, the Duchy of Cornwall (Prince Charles) may be entitled to take its share. And nobody wants that.

Once you've made a will, you need to review it every time there is a significant change in your life - marriage, divorce, kids, grandkids, house move. Keep on top of it - your estate may regret it if you don't.

Inheritance Tax (IHT)

As part of your will, you might want to consider inheritance tax planning. If you're married, you can leave your estate to your spouse without incurring any inheritance tax. But when the partner dies, tax may be payable on everything they leave over the value of the tax-free IHT threshhold (which usually includes everything left by the first partner).

Couples with an estate worth less than the threshhold (changes each year - £300,000 for the 2007/8 tax year) shouldn't need to do any special planning, but given the increased values of most folks biggest asset - their property - coupled with savings, investments and other odds and sods, many easily exceed this limit without even realising it.

For instance, if Mr and Mrs A's house and effects are worth £450,000 and Mr A dies, all of his belongings will pass to Mrs A, with no tax to pay. Cool. But when Mrs A dies, her son and daughter-in-law will have to pay 40% tax on £150,000 of their inheritance (the value of their stuff over the tax-free IHT limit). Ouch.

However, with some careful planning ahead of time, Mr and Mrs A can leave their entire estate to their son and daughter-in-law and not have to pay an tax whatsoever. How? Make use of the tax-free limit on the death of the first partner. In very general terms, the couple need to write their will (and arrange their affairs) so that when one of them dies, goods/money/property/investments up to the value of the tax-free limit passes to the kids - the rest goes to the surviving partner. Then when the surviving partner dies, the amount he or she has to leave will be less than the tax-free limit too.

Using the first example again; Mr and Mrs A's house and effects are worth £450,000 and Mr A dies. This time, the will says that £150,000 of his belongings should pass to his kids, with the remaining £300,000 going to Mrs A. The transfer to the spouse is tax-free as before. The transfer to kids is less than £300,000 so that's tax-free, too.

This time, when Mrs A dies, she only leaves £300,000 to the kids - which again is tax-free. No tax to pay whatever. Way cool.

This is a simplified guide to what can be a relatively complicated process. But used correctly where large estates are concerned it can save up to £120,000. If you think you're estate might be worth more than £300,000, you should think very hard about seeking specialist financial planning advice.

Terminal benefit on insurance policies

One of the other recent posters mentioned a benefit that may be payable if the policyholder has a very serious illness. Many newer life policies now include a terminal illness benefit clause - this entitles the policyholder to receive the plan benefits while they are alive if they are diagnosed with a terminal illness. However, this shouldn't be confused with critical illness policies.

Terminal illness benefit is usually only payable on diagnosis of a terminal illness - and where the policyholder has been given less than twelve months to live.

Critical illness benefit is usually payable on diagnosis of one of a number of illnesses or diseases specified in the policy terms. The condition does not have to be either fatal or have a terminal prognosis (although as the name suggests, it is likely to be very serious) - but it must meet the specific policy criteria to qualify.

If you've already got either one of these policies, check the wording carefully so you know what you're covered for. Likewise, if you're thinking of applying for one, do the same - and make sure it covers everything you want it to. Again, generally speaking, the more expensive the policy, the better/wider range the cover is likely to be - remember, you gets what you pays for.

Hope that helps.

SuzySF

Thanks for your reply, since i posted I asked my Solicitor about re-writing Mum's will and explained that Dad had died some years since, so Mum had everything, and she has two daughters - me and my sister that were both named in the original will as benefactors (50/50 split) in the event of both dying. He said it would be straightforward as there are no bequeths (spelling !) and no assets as such (investments, bonds etc) and the property has been sold since and mum is now in rented accomodation.

We have re-written the will, straight 50/50 split of assests (with us both named in full - me in both my married and maiden name, my sister is not married) after all costs, deductions etc. Her funeral costs are funded by insurance so these are covered sepearately.

hopefully this wont be needed for some time to come yet, but who knows what tomorrow brings .....

marsha8

inkie wrote: »

I am a minister and so have a lot of dealings with the funeral directors. I was there the other day having a coffee with them, and they told me that if you are a Co-op divvy member (which costs £1 to join), then you get £56 reduction on the funeral bill if you use Co-op funeral service. Better in your pocket than theirs.
Can I add as well that if you have a 'pre-paid' plan, then if the deceased is a a church member and therefore your minister doesn't charge a ministers fee, then please ensure that the final bill is checked, as this fee is costed in for a pre-payment plan, and so will need reimbursing.

I bought a pre-payment plan with the Co-Op a couple of years ago & was not offered any discount although I do have a Dividend.Should I follow this up or is it a recent idea?

marsha8

nqsenile wrote: »

Any thoughts on comparison of the different "Prepaid Funeral Plans"

I looked at numerous companies prices three years ago & was quite shocked at the cost.I found the Co-Op to be competitive at £1,650.I understand that if I live for many many years then extra would have to be paid by family because of inflation.I have chosen my readings(non religious)& two pieces of music which I have recorded on cassette & recently onto CD also.It seems morbid to some of you I suppose but I feel strongly about my service & wish to have it done my way.No hymns as I always find it difficult to sing when I am crying.I am a registered doner & hope that I can help others with my bits & pieces as they will be of no use to me.(I'm 65)

ladywag_2

When my dad died - he elected to leave his body to medical science and was accepted (please be aware if you would like to try this option they do not accept everybody!!) and it is not really an easy option for the family left behind - although we respected his wish and made the most of everything

As a family we were allowed the option of being alerted when they had "finished " with the body so we could collect it - or just letting them get on with it. They would cremate him and put a stone in their garden of memorial.

We chose not to be informed - this meant we were free to get on with the grieving process as soon as his body had been collected - we though about the reprecussions of having no funeral - you really need something to mark moving on into the future without them! So we had a memorial "party" . It was just like all our other family get togethers (weddings, christenings, 21st etc, only with a very different reason) - and it really worked! we all remembered dad in the best possible way - with a happy celebration of his life.

sue.b_2

My children and I did a diy funeral for my husband two years ago. We used the book from the Natural Death Centre mentioned in earlier posts, bought a wicker coffin, used my husband's estate car to carry the coffin (he would have loved that) to the woodland burial site and hired the village hall for his friends and colleagues to meet and talk about him and his life. Very cheap but very personal too. It probably sounds odd but we had fun doing it ourselves and felt that we were really in control. Other family funerals, especially cremations, have been grim affairs and people have said that they felt they did not fully participate and were swept along by the undertaker and his standard package.

I thoroughly recommend diy and want my children to do the same for me by spending as little as possible on disposing of my body, if there is anything left to dispose of after organs have been harvested. After all I will not be there to see it and none of us believes in an afterlife. I want them to spend my money on things they want not on a meaningless ceremony.

halia

reading this with interest as I want to update our wills etc. Now do we really need a solicitor?

I think we have straightforward affairs, well under the inheritance tax bracket. I would write new wills if and when we were worht more than £300k anyway so no need to plan for that.

We are married and have one child (no more possible) and want a simple will with estate going to surviving partner, and then to our child.
Guardians for child will be my parents or if they die before us my younger brother and his partner.

The only bit I'm unsure about is what about the guardians holding the estate in trust? I dont' want anyone struggling to raise DS, but on the other hand i'd like to think some of the money could be saved for him when he hit 18.

hostertlady

my will needs updating too, do we have to use the original solicitors?? and isnt it best if they come to the house cos everything they ask you about is there isnt it? ( bank details, paperwork and more paperwork_)

sunnyflower

Well we've just updated our will this week.

It has cost a lot (0ver £500 pounds), not that we've got loadsa money to leave, but we wanted to safeguard our house in case the survivor remarries and the new spouse / family want a share of the proceeds. So the house registry / ownership status has to be altered. Then it goes into trust.

My husband insists he would never remarry if I kicked the bucket first, and I don't suppose I would either, but you can never say never.

This will also protects any of our children being evicted to force a house sale if the survivor has to go into care.

We also had to sort out guardianship and how the kids would be supported as they are all under 18

There are various other things we have covered, and although we balked at the price initially, decided it was worth it when weighed against the strife our children could have if one of us shacks up with someone else!

Now it's done we can forget about it and get on with our lives (minus the new bed which we had earmarked the money for!!!)


Now we've done