Reply to: Creating a will

[glashIFA@Paramount]

In my specific case we are tenants in common and there are trusts on death and the wills were properly (hopefully!) drafted so we should be OK.

It was whether a survivor could actually get forced out that I was curious about, and it seems the answer is "possibly".

Thanks,

"Possibly", if no trusts in place, but thats not the case with you so the answer would be NO, cannot be FORCED out because a condition of the trust will be lifetime right of occupation for the survivor.
However, other conditions might also be applied by trustees, as i said, sale to take place on remarriage, must maintain buildings and contents cover, must maintain the property in a good condition etc. Of course, if the trustees and the survivor were both in agreement the property could be sold at any time and this would provide capital to the kiddies then.

[ASB]

Sprogs can always go to court for an "order for sale" but very messy and outcome uncertain.

In my specific case we are tenants in common and there are trusts on death and the wills were properly (hopefully!) drafted so we should be OK.

It was whether a survivor could actually get forced out that I was curious about, and it seems the answer is "possibly".

Thanks,

[glashIFA@Paramount]

Depends on complexity. My mother's will was handwritten in biro on a couple of sheets of writing paper. We had no problem with it at all.

Absolutely right, if affairs simple then no probs. If IHT issues then really needss more than this.
Whilst on subject of Wills might as well suggest this is always a good time to put in place an EPA (Enduring Power of Attorney)-giving people a chance to name a legal and financial guardian if they become mentally or physically incapable of looking after themselves.
If this isn't done, and the above happens, the Court of Protection may appoint a solicitor to become a trustee - probably VERY EXPENSIVE.

[glashIFA@Paramount]

glash:

I meant to ask this on the other thread but forgot:

Consider the case where a property is jointly owned, so ASB owns 50% of ASB towers and Mrs ASB owns the rest. No mortgage or other charges etc.

I decide to leave everything I own (including my 50% share) to ASB sprogs.

Having died ASB sprogs decide they want the cash from the house too. Mrs ASB has no cash to pay them (and is presumably royally hacked off at this turn of events). How does this work out in practice? Since she owns half the house can she be slung out and it sold from underneath her to settle the esate? Equally she absolutely owns half the property, surely this has some impact on the value of the property since it is not exactly an open market.

Hi ASB,

first thing to clarify is ownership. If jointly owned ie joint tenancy, then you actually both own 100% of property so on first death the survivor has full ownership of property.
If owned on a Tenants in common basis then i would suggest a Discretionary will trust which will allow your half of the property to drop into a trust on death (so outside of Mrs ASB estate for IHT purposes). Ownership of your half is the trust but effectively the beneficiaries, sprogs, whilst Mrs ASB retains a lifetime tenancy right.
If you left your half via a will then i would be VERY surprised if the solicitor didn't expand on it with certain conditions similar to above with extras like "to be sold in event of remarriage" etc.
Sprogs can always go to court for an "order for sale" but very messy and outcome uncertain.

[ASB]

A follow up question

glash:

I meant to ask this on the other thread but forgot:

Consider the case where a property is jointly owned, so ASB owns 50% of ASB towers and Mrs ASB owns the rest. No mortgage or other charges etc.

I decide to leave everything I own (including my 50% share) to ASB sprogs.

Having died ASB sprogs decide they want the cash from the house too. Mrs ASB has no cash to pay them (and is presumably royally hacked off at this turn of events). How does this work out in practice? Since she owns half the house can she be slung out and it sold from underneath her to settle the esate? Equally she absolutely owns half the property, surely this has some impact on the value of the property since it is not exactly an open market.

[xoggoth]

Depends on complexity. My mother's will was handwritten in biro on a couple of sheets of writing paper. We had no problem with it at all.

[glashIFA@Paramount]

This thread had quite a bit of possibly relevant info and what appeared to be an expert in these matters chipping in.

http://forums.contractoruk.com/threadnav5541-3-10.html

I've come in late on this but lets try and take it from the top although i appreciate that some of the points have alreay been answered.

Ivor1 on question 1. If you die without a will then your 60% share of the property goes to your estate, not your partner. If its over the 285K threshold then your estate is liable for the tax bill - could create loads of probs if the only asset was the property which needed to be sold to release funds to pay the bill, which can't be sold until the bill is sorted etc etc. Estates normally have to borrow to pay the bill. Also without a will you die "intestate" which is a much lengthier process than dying having made a will.
When your grandad died and the house went to your nan chances are it was held on a joint tenancy basis but even if that wasn't the case there would have been no IHT because of interspousal exemption, assuming they were married of course.
ASB is right - interspousal exemption is a very poor mitigation exercise. In fact it doesn't mitigate it, it just defers it till 2nd death and then you've lost the IHT allowance of the first who died which means you could be paying £114k didn't need to be paid.

Fun isn't it!!!

If you make a will and bequeath your share of the property to your partner then IHT is still payable as you are not married and don't benefit from "interspousal exemption". Plus, if its your intention that she gets your share of the house then you'd be better of owning it on a joint tenancy basis so that 100% ownership reverts to the survivor.

If your LTD has a value include it in the will. My experience is that solicitors are best placed to prepare wills but make sure they are a solicitor that specialises in this area and not a general solicitor - spent a lot of hrs unravelling poorly drafted wills.

[rootsnall]

This thread had quite a bit of possibly relevant info and what appeared to be an expert in these matters chipping in.

http://forums.contractoruk.com/threadnav5541-3-10.html

[martinb]

I need to sort my will out, dont have one at the moments and have assets etc

Got a few questions,

1. I have a partner not married house is in joint names but we have a 'tenants in common agreement' sighned 60/40. Let say for the sake of a figure house is worth £700k, if she inherited from me my £420k 60% share would that incurr inheritance tax as it was over the freshold ? Concerned she would have to sell the place to cover tax bill.

2. Do I need to put anything in the will about my ltd in case its still operational when I snuff it ?

3. Who usually looks after a will, a solicitor, bank or do you just trust someone with it and hope they dont take a look?

Cheers

I would always suggest professional advice. It will end up saving you FAR in excess of what it costs you. I have the original of the will lodged with a solicitor (no charge for this) and have a copy for myself.

[ASB]

There is no inheritance tax between spouces....


Often used as a tax mitigation measure.

But it can be very ineffective because it can increase the tax on the second death by about 100k

[ASB]

But when my grandad died and the house went into my nans name she didnt have to pay any inheritance tax. Thats what Im not clear on, the house sold for £317k, so lets assume a 50/50 split of £158.5k so under the fresh-hold, is it only if the other persons 50% is more than the threashold ?

The tax is due on the estate. In the situation you describe above it would not be incurred either due to free transfer between husband and wife or because they were joint tenants, or possibly some other reasons related to the particular circumstances.

Currently the estate cannot be wound up until the bill is setlled and currently you cannot sell anything in the estate to settle the bill (although there are changes coming).

[monkeyboy]

There is no inheritance tax between spouces....


Often used as a tax mitigation measure.

[Ivor1]

This is not allowed. She would have to borrow the money. You cannot use portions of the estate to settle the tax due on it.

But when my grandad died and the house went into my nans name she didnt have to pay any inheritance tax. Thats what Im not clear on, the house sold for £317k, so lets assume a 50/50 split of £158.5k so under the fresh-hold, is it only if the other persons 50% is more than the threashold ?

[VinnyB]

I need to sort my will out, dont have one at the moments and have assets etc

Got a few questions,


2. Do I need to put anything in the will about my ltd in case its still operational when I snuff it ?

Cheers

I asked this in a previous thread..... http://forums.contractoruk.com/thread13690.html and received the answer.

[Lucifer Box]

Concerned she would have to sell the place to cover tax bill.

This is not allowed. She would have to borrow the money. You cannot use portions of the estate to settle the tax due on it.