Property Inheritance Question
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greatnewseverybody
Posts: 1 Newbie
Apologies, very new to trying to understand this complicated matter!
My question is that if you have been named specifically to inherit something from a will, for example a house, but there are other people who will be receiving other smaller elements (mainly cash gifts) as well, what happens if the estate needs to sell the house (the estate would be well over £325,000) to be able to afford to pay the inheritance tax? Does the property get sold, all the bills, debts etc get paid, then the cash inheritance stated in the Will get paid out, then whatever is left go to the person who was originally stated to inherit the property? Really not sure how this works.
Thanks,
Paul
My question is that if you have been named specifically to inherit something from a will, for example a house, but there are other people who will be receiving other smaller elements (mainly cash gifts) as well, what happens if the estate needs to sell the house (the estate would be well over £325,000) to be able to afford to pay the inheritance tax? Does the property get sold, all the bills, debts etc get paid, then the cash inheritance stated in the Will get paid out, then whatever is left go to the person who was originally stated to inherit the property? Really not sure how this works.
Thanks,
Paul
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Comments
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It does depend on the exact wording of the will. However, if you are left the house but after that there is a shortfall then the other beneficaries get a percentage but the house would still be yours.greatnewseverybody wrote: »Apologies, very new to trying to understand this complicated matter!
My question is that if you have been named specifically to inherit something from a will, for example a house, but there are other people who will be receiving other smaller elements (mainly cash gifts) as well, what happens if the estate needs to sell the house (the estate would be well over £325,000) to be able to afford to pay the inheritance tax? Does the property get sold, all the bills, debts etc get paid, then the cash inheritance stated in the Will get paid out, then whatever is left go to the person who was originally stated to inherit the property? Really not sure how this works.
Thanks,
Paul0 -
More info required. Is the person receiving the house a direct descendant of the testator? What is the marital status of the testator? Have others been named as residual beneficiaries?0
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Yorkshireman99 wrote: »It does depend on the exact wording of the will. However, if you are left the house but after that there is a shortfall then the other beneficaries get a percentage but the house would still be yours.
[FONT=Verdana, sans-serif]That could be pretty harsh on the other beneficiaries, would it still work that way in this example:[/FONT]
[FONT=Verdana, sans-serif]House worth £500k and £50k cash with IHT bill of £50k[/FONT]
[FONT=Verdana, sans-serif]House specifically to child, 10k each to 4 grandchildren and £10k residue to sister.[/FONT]
[FONT=Verdana, sans-serif]Would the child get the £500k house but the other 5 would get nothing?[/FONT]0 -
Not harsh simply the law. In the scenario you ask about the grandchildren would get nothing. It is up to the testator, as advised by a solicitor, to have will worded the will to avoid such situations.[FONT=Verdana, sans-serif]That could be pretty harsh on the other beneficiaries, would it still work that way in this example:[/FONT]
[FONT=Verdana, sans-serif]House worth £500k and £50k cash with IHT bill of £50k[/FONT]
[FONT=Verdana, sans-serif]House specifically to child, 10k each to 4 grandchildren and £10k residue to sister.[/FONT]
[FONT=Verdana, sans-serif]Would the child get the £500k house but the other 5 would get nothing?[/FONT]0 -
Yorkshireman99 wrote: »Not harsh simply the law. In the scenarioo you ask about the grandchildren would get nothing. It is up to the testator, as advised by a solicitor, to have will worded the will to avoid such situations.
[FONT=Verdana, sans-serif]Which law is it that covers that situation? What if there is only £10k cash but still a £50k IHT bill. Does the cash beneficiary lose all and the house beneficiary have to come up with £40k?[/FONT]0 -
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There are rules for how all this gets done,
look up abatement will help understand the order that legacies get reduced when insufficient exist to cover them all.0 -
Does the will state that the property is 'to be held in trust'? A Trust doesn't always mean for the benefit of children, it can be used to safeguard a particular legacy for any beneficiary.0
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Tom is asking theoretical questions. He should instead be doing as per post #8. The main purpose of this forum is to try and help real people solve real problems not as tutorial.Does the will state that the property is 'to be held in trust'? A Trust doesn't always mean for the benefit of children, it can be used to safeguard a particular legacy for any beneficiary.0 -
Everything depends on the wording, often smaller gifts will be given free of tax, with any tax burden falling on the residual beneficiaries.
Leaving specific property to people in a will can be a very bad idea, as there is a good chance that the property may no longer be owned by the testator at the time of their death so the bequest would fail, or as it seems in this case there is insufficient liquid assets in the rest of the estate to meet the testators bequests and tax.0
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